Constellations, Launch, New Space and more…

Swiss Space Systems Seeking Investors

By Doug Messier
Parabolic Arc
August 21, 2014
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SOAR spaceplane atop an A-300. (Credit: S3)

SOAR spaceplane atop an A-300. (Credit: S3)

PAYERNE, Switzerland, August 20, 2014 (S3 PR) –– Swiss aerospace company Swiss Space Systems – S3 aims to become the world leader in the small satellite launch segment, a market bound for impressive growth estimated at over $ 240 billion by 2020, with over 200 satellites expected to be launched to orbit every year. S3 is now officially announcing ongoing and upcoming discussions with prospective financial and strategic investors to further strengthen its position of European leader in this booming market.

A Swiss company with strong global partnerships

Swiss Space Systems, incorporated in 2012, has a core program that aims at developing reusable suborbital space systems – the SOAR launch system – in order to launch small satellites with a maximum weight of 250kg to low Earth orbit.

The objective is to carry out the first test flights by 2017 and first commercial launches by 2018 – an ambitious timetable, but as the founder and CEO of S3, Pascal Jaussi, said: “Our launch program benefits from the input of technologies previously developed and certified through original partnerships between major players in the aerospace sector, such as the European Space Agency (ESA) who validated its technical feasibility, Dassault Aviation, Thales Alenia Space, JSC Kuznetsov and RKK Energia”.

The S3 program is the privatization of the Hermès and NASA’s X-38 programs, whose technological heritage allows S3 to save time that would otherwise be spent on research and development, thereby enabling the company to reach the 2017 target and reduce production costs at the same time, with a budget substantially lower than its peers: US$275 million (250 million CHF) up to the first satellite launch.

S3’s engineering team, supported by its industrial and academic partners, is steadily progressing on the research & development phase of the launching system, as planned.

An integrated business model with distinct business units

The company is currently operating two distinct business units as part of its plan: S3 suborbital systems for satellite deliveries, and S3 ZeroG. While predominantly focusing on small satellites, the ZeroG (zero gravity flight) service is the result of a structured & monetized rollout approach by S3’s management team to build its business on near-term revenue-generating phases.

S3 has designed its product and service around an Airbus aircraft to be the first stage of its space launch system. Therefore, before carrying the SOAR shuttle on its back for its first satellite delivery mission in 2018, the aircraft will be utilized to offer passengers and researchers zero gravity flight experiences beginning in early 2015, generating substantial early revenues for S3 during its first three years of operation.

The company is organizing a first world tour with over 100 flights in some 20 destinations for 2015. According to Richard Joye, VP of Business Development: “S3 has an integrated business model for which ZeroG is a first step. By operating our Airbus internationally for ZeroG flights, we demonstrate that we can master the first stage of our space flight system. It is also the best ambassador of S3 in the markets we will target with our launcher of small satellites.”

Jean-Daniel Sciboz, Senior VP at S3 points out: “it is without any doubt that we are building a multi-billion dollar company with yearly revenue potential in the hundreds of millions of dollars. We are disrupting the aerospace industry with our aim of offering safe, affordable, recurrent and responsive space access for all”.

Introducing new concepts and enabling new markets

Swiss Space Systems has based its airborne launch system on a fully reusable suborbital shuttle, the SOAR, introducing a new concept in the space industry: the ongoing maintenance of space systems. Reusability of the launch system guarantees affordability, with target prices never seen before for this class of payload, offering sub-$10 million for a 250kg launch, more than four times less than current market prices.

In addition to affordability, it offers flexible and recurrent access to space. The small satellite market is fueled by a fast-growing demand from end-users and manufacturers, looking at launching constellations of satellites with limited lifetime, built around the idea that space is the next frontier that will foster a positive environment for the emergence of new business models.

These customers will need to launch a multitude of satellites where competitive pricing is key, but the ability to get a low-cost ride to space and to frequently replace satellites and upgrade elements of a constellation will be a determining factor for continuous future success. S3 is positioning itself to address those needs. Investors have already understood that the space industry is currently at a turning point for accelerated growth.

The wake-up call again comes from the Silicon Valley, which sets the tone by investing hundreds of millions of dollars into low-cost launch systems, small satellite technologies and associated services, such as low cost imagining, affordable communication services, oil and gas solutions, earth monitoring, post natural disaster services, among others.

Google recently announced the acquisition of SkyBox Imaging for $500 million, aiming at launching a constellation of over 160 satellites. Venture Capitalists are seeding NewSpace companies and innovative ventures that are truly disrupting this industry, which has historically relied on public funding.

Visionary investors recognize the next potential investment frontier: Space

S3 is the only private commercial space company announcing such an ambitious but realistic project outside of the USA. By pioneering the next European space age, S3 is creating a precedent that is attracting industrial leaders, governments and investors. As a result, many opportunities are presented to S3, as it looks to capture the most promising ones for rapid growth.

S3 ZeroG was born from the willingness to optimize and monetize an asset for actual market demand, and S3 is now looking to aggressively materialize such opportunities, by penetrating new markets to ensure its leadership, by securing access to key technologies through acquisitions, or by further developing proprietary solutions with the objective of realizing higher profits.

As such, S3 is talking to investors around the globe looking to deploy capital alongside or to directly invest in key technologies or related growth projects. S3’s key people have been running road shows in Europe, Asia and elsewhere, where visionary companies and investors recognize the potential of the active commercialization of space. Discussions with strategic partners for a direct investment into the S3 group of companies in the $33-55 million range are being held.

While the S3 Group has not announced any specific binding agreement yet, it welcomes discussions about opening the equity of underlying companies of S3 in order to build a quicker access to market and strengthen its market position internationally.

S3 aims to bring alongside the company a stronger consortium of partners to dominate the growing small satellite segment, and offering a more integrated end-to-end solution to the market.

As part of this international road show, an S3 Swiss Investor Pitch Day reserved to high net worth individuals, family offices, pension fund companies and other wealth management professionals will be held on September 12th in S3’s headquarters in Payerne (Switzerland).