This space CEO got $13.5 million from Andreessen Horowitz to outmaneuver Facebook and Google and bring the whole world online

Astranis Founders John Gedmark and Ryan McLinko

Astranis is a satellite company based in the San Francisco Bay Area, building geostationary satellites that it says are smaller, cheaper, and faster to make than those of its competitors.
The company just raised $13.5 million in a round led by Andreessen Horowitz; Martin Casado, an Andreessen Horowitz general partner, will join its board.
Astranis plans to sell its satellites to telecommunications companies, helping them connect remote parts of the world on the cheap.
Astranis' CEO argues his company's satellites are a more practical solution for connecting the world than what Google and Facebook have tried to do.

In early January, a startup called Astranis tested MicroGEO, its first-ever orbital internet connectivity satellite, by beaming up a couple of high-definition videos.

The first video was a recording of the rocket launch that took MicroGEO into orbit. The second was a recording of tennis star Roger Federer's winning match in the 2018 Australian Open.

"So now Roger Federer has been to space," joked Astranis CEO John Gedmark.

The videos went up to MicroGEO, had their signals reprocessed, and then were beamed back down to an antenna on Earth — a fairly standard procedure for an internet connectivity satellite. The difference is that MicroGEO is smaller and cheaper than anything else out there.

astranis microgeo

With a working prototype it can now tout, Astranis has closed a new round of financing. On Thursday, it announced it's raised $13.5 million in a Series A round led by Andreessen Horowitz — the legendary Silicon Valley venture-capital firm that was an early investor in Facebook, Twitter, and Airbnb. As part of the investment, Martin Casado, a general partner at the firm, will join Astranis' board.

The company, which hopes to find a big market for MicroGEO among telecommunications companies, plans to use its new funds to build a satellite assembly line and ramp up production. Astranis hopes the satellites will allow its customers to make broadband internet service available to the billions of people around the world — in countries like India and China, and even in rural parts of the United States — who aren't currently connected.

"We believe there's a better way, there's a better approach. We can get smaller and less expensive," said Gedmark, who holds a master's degree in aerospace engineering from Stanford.

Not fast enough

The goal of getting the whole world online is not a new one. For the last several years, Google, Facebook, and other Silicon Valley giants have tried to tackle the connectivity problem with a range of so-called moonshot projects — everything from suspending wireless access points from balloons, to self-piloting drones that shoot internet-connectivity lasers back to Earth.

Those projects could eventually pay off, but Gedmark is impatient for results.

"Google and Facebook are spending enormous sums of money to solve it, and we're just not making progress," he said.

Astranis could step into the gap and speed up the process, Gedmark said. Its MicroGEO satellites use tried-and-true antenna technology, so there's little risk that they won't work.

And the satellites have a big advantage by being relatively small. Where most internet-delivery satellites are the size of a double-decker bus, the Astranis satellite is about the size of a mini-fridge.

astranis team Rival satellites cost in the hundreds of millions of dollars to produce. But because of their smaller size, each MicroGEO satellite should cost in the tens of millions of dollars.

They're "orders of magnitude cheaper," said Andreessen Horowitz's Casado.

Another key part of Astranis' strategy comes from its software.

In the past, the antennae for internet connectivity satellites had to be custom-built and pre-tuned, Gedmark said. That added both time and cost to the process of building satellites.

Astranis is going a different route in the MicroGEO, using a so-called software-defined antenna for its satellite. That technology will allow it to build a whole bunch of identical satellites that use the exact same hardware for their antennae. The company will be able to adjust the antennae to the specific frequencies of each of its telecommunications provider partners after the fact via software.

That should allow Astranis to achieve economies of scale with MicroGEO beyond what most satellite manufacturers can achieve today, Gedmark said.

What's more, the company's use of a software-defined antenna system dovetails nicely with the background of Casado, its new board member. In his previous career, he was the chief technology officer of Nicira, a startup that all but invented the notion of software-defined networking before it was acquired by VMware for $1.26 billion.

Indeed, Astranis' reliance on software is "right in our wheelhouse" at Andreessen Horowitz, Casado said.

astranis size comparison

With its advantages in terms of cost of production and economies of scale, Astranis is poised to make a dent in the massive satellite industry, Gedmark said. The satellite business will be a $260.5 billion market in 2017 with more growth ahead, Tom Stroup, president of the Satellite Industry Association, told the National Space Council earlier this week.

"It's as large a market as I've ever faced in my life," Casado said.

'We just can't put stuff in the sky fast enough'

The sheer size of that market is spurring Astranis to ramp up production as quickly as possible, Gedmark said. There's a huge push to get people online, but even with the growing interest in using satellites to connect them, the infrastructure just isn't there.

"We just can't put stuff in the sky fast enough," he said.

You shouldn't expect to get internet access directly from one of Astranis' satellites. Instead, the company plans to use them to offer so-called back-haul service, helping wireless telecommunications providers connect their cell towers to the wider network. For those companies, the pricey part of expanding their networks is laying down the cable lines they typically use to connect their towers.

Astranis' satellites will operate in a geostationary orbit, meaning they'll sit in the sky at a point where they move at the exact same speed as the Earth. This means that if you somehow managed to launch an Astranis satellite from the tip of the Empire State Building, it would always appear to be hovering right above that point.

Martin Casado

Because they will be fixed in place, the satellites will be able to act as a virtual wire connecting different towers. And using them should be less expensive than laying down costly fiber optic cable.

The effort to get internet access to underserved communities resonates with Casado. He's already involved in several nonprofit efforts to connect rural American communities. With the rise of Astranis and other efforts — such as that from Elon Musk's company, SpaceX — he's hopeful that big things are on the horizon for the space industry and the future of connectivity.

"I think we're going to see a lot of movement in this space," Casado said.

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