Launchpad back in sight for Kleos Space’s nanosatellite data mining strategy

Radiofrequency reconnaissance data-as-a-service (DaaS) company Kleos Space (ASX: KSS) has unveiled a new launch date for its four Scouting Mission nanosatellites aboard NewSpace India’s space mission.

Years in the planning, the anticipated launch is targeted for the first half of November from India’s Satish Dhawan Space Centre, SDSC SHAR, the company said.

Kleos confirmed it has all necessary operating licenses in place and has also lined up its eventual data products that will be offered to various commercial and public sector companies including gathering shipping location data to better manage global ocean traffic and reduce illegal activity.

With the launch pad coming into view, Kleos said its launch team arrived in India last week to complete final preparations and ensure its batch of four nanosatellites is correctly deployed into Earth’s orbit.

Kleos manufacturing, assembly, integration and test manager Gavin Bowyer, supported by In-Space Missions director of space systems Ed Stevens and rideshare and mission management provider Spaceflight’s mission manager Marcy Rugland, arrived in Chennai last week and are expected to remain in place until next month’s launch.

On arrival, the team has been forced to quarantine for six days on the launch site in facility accommodation. Post quarantine, they are expected to spend a week carrying out a system checkout and mechanical inspection before battery charging and fuelling.

“The satellites will be armed for flight, inserted into their dispensers and finally integrated onto the PSLV-C49 launch vehicle,” Kleos said.

The orbits of Kleos’ first two clusters are designed to provide strategic coverage of the South Pacific Ocean between Australia and New Zealand and the Indian Ocean covering the west coast of Australia.

COVID sanctions lifted

Importantly for Kleos, its operations have now resumed following the impact of the COVID-19 pandemic, which led to operations being grounded and development halted earlier this year.

“We are immensely proud of the entire team; launching satellites is always a huge challenge and the COVID-19 pandemic has made logistics and travel even more difficult,” Kleos chief executive officer Andy Bowyer said.

“Their dedication to getting our Scouting Mission satellites into orbit and to collecting data in order to deliver enhanced situational awareness for our customers has been remarkable.”

Data contracts in waiting

Kleos claims it has more than 130 potential customers in its current pipeline, equating to between $80-$100 million in potential revenue with the first cluster and doubling to $160-$200 million with the second cluster.

These pipeline contracts include customers in defence and civil government, as well as 26 resellers which have the potential to bring in more than 10 customers each.

The company won a contract with the United States Air Force Micro-Satellite Military Utility programme in September and bagged a further contract with NYSE-listed L3 Harris for an integrator placement on the US government’s GSA platform.

Additionally, Kleos said it also acquired “multiple nation-state collaborations” including work with the Brazilian government through which the company has secured several pre-orders.

In a statement to the market, Kleos announced it had secured over $8 million in early adopter contracts including “major global defence players and governments” in the US, Europe and South America. In South America specifically, Kleos secured pre-orders with leading Chilean company GEOCIENCIAS and Brazilian HEX Geospatial Technologies for up to $1.5 million per year.

In the United Kingdom, Kleos’ partner Geollect has signed a minimum €300,000 (A$496,000) agreement to use its data. Geollect is a prominent UK firm specialising in geospatial intelligence and is currently hired by the UK’s Royal Navy and other prominent global maritime organisations.

As a further potential revenue driver, the COVID-19 pandemic has created additional demand for Kleos’ nanosatellite data. The company expects pandemic control to require data sourced from satellites, as a surveillance tool and a means of detecting criminals exploiting black markets and government restrictions.

According to research conducted by Technavio, Kleos’ addressable market within the global maritime information space is estimated to be around US$1.41 billion (A$1.96 billion).

With ambitions of scooping up plenty of early-adopter demand for nanosatellite-derived data, Kleos has partnered with SYPAQ as its exclusive agent in Australia and New Zealand.

SYPAQ will exclusively market and sell Kleos data on behalf of the company into new and existing programmes and customers and provide direct local support to Kleos’ regional government and industry customers.

In the view of Kleos chairman and executive director Peter Round, Kleos’ business model involves using “integrators”, companies that combine data sets before selling a derived product, as well as “channel partners”, companies with the technical capabilities to add value to the data product and support the aftersales appropriately. Kleos said it will also use agents where there is a need for additional support requiring exclusivity in a region.

“SYPAQ offers us access to end-user requirements, existing programmes and existing budgets enabling Kleos to engage with a far wider customer community quicker than if Kleos was to work directly with end-users as well as being able to provide pre- and post-sales support to the region,” Mr Round said.

Acting as “exclusive territory agents”, SYPAQ has been tasked with providing direct tactical and operational support to Kleos’ customers and will be the primary point of contact for both sales and support in Australia and New Zealand.

Could be a value add rather than competition

In its latest presentation, Kleos said it has no direct competitor with equivalent technology, but the most comparable company is US-based Hawkeye360, which recently closed a US$70 million capital raise at a pre-money valuation of US$200 million and has already secured $50 million worth of contracts since its launch.

According to Kleos, both companies will generate similar data and customers have advised they will demand both “as an insurance policy if one fails, and also as a value add for more data”.

“These governments and defence organisations are intent on receiving as much data as possible – hence it is not a competition but rather both will supply users,” it said.

However, the quality of Kleos data is “far superior as the information comes from a four satellite cluster versus Hawkeye360 having only three satellites in its cluster”, Kleos added.