SpaceX to acquire Swarm Technologies

WASHINGTON – SpaceX has quietly agreed to acquire Swarm Technologies, a company that operates a constellation of small satellites providing Internet of Things services.

Swarm disclosed the acquisition in a series of documents filed with the Federal Communications Commission on August 6, where the company requested approval to transfer its existing satellite and ground station licenses to SpaceX. The companies signed the merger agreement on July 16, according to the documents, under which Swarm would continue to operate as a wholly owned subsidiary of SpaceX.

The companies had not publicly disclosed the acquisition prior to the FCC filing. Neither SpaceX nor Swarm responded to emails containing questions about the deal. The SpaceX subsidiary that is merging with Swarm, called Swarm Holdco, was incorporated in Delaware on May 5, according to state records, suggesting talks between the two companies had been underway for months.

Swarm operates a constellation of 120 small satellites, each smaller than a single unit cubic satellite, to provide low data rate two-way communications for markets such as agriculture, energy and transportation. The company claims it can provide services at a fraction of the cost of traditional satellite services.

In the FCC filing, the companies say the acquisition will give Swarm the resources to compete with several other companies that operate similar satellite systems. “Swarm’s services will benefit from the best capitalization and access to resources available to SpaceX, as well as the synergies associated with the acquisition by a provider of satellite design, manufacture and launch services,” said t -he.

A footnote refers to recent events supporting this argument, such as the ongoing acquisition of Orbcomm by private equity firm GI Partners, Spire’s plans to go public through from a merger with a specialist acquisition company, Kepler’s $ 60 million Series B funding round and Astrocast’s statement that it plans to go public.

Swarm’s last announced funding round was in early 2019, when it raised $ 25 million in a Series A round. The company, however, said the funding was more than enough to roll out its constellation and get started. its services.

“We are now at a point where we are able to set up our entire network of 150 satellites for significantly less than our Series A,” Sara Spangelo, co-founder and CEO of Swarm, said in a webinar organized by Caltech’s. Keck Institute for Space Studies in March. She added that the company at the time had around 30 employees and had raised a total of $ 35 million.

The benefits for SpaceX of acquiring Swarm are less clear. Swarm’s satellites operate in a different frequency band, VHF, than SpaceX’s Starlink broadband satellites. The additional revenue that Swarm provides to SpaceX will likely be tiny compared to the fees the company collects from Starlink beta testers, let alone its space transportation services.

The file suggests that SpaceX is primarily interested in the technology and personnel of Swarm. “SpaceX will also benefit from access to the intellectual property and expertise developed by the Swarm team, as well as the addition of this ingenious and efficient team to SpaceX,” the document said.

It’s unclear what the acquisition will mean for Swarm’s long-term plans. During the March webinar, Spangelo was asked where she had seen the company in 10 years. “I think we will have launched at least one, if not two, different constellations,” she replied. “A natural progression would be bigger – or maybe smaller – satellites that can do a lot more data and connect more types of devices.”

“We definitely have aspirations for other kinds of demand curves for things we can do in the future,” she added. “You will have to stay tuned.”