SpaceX to acquire small satellite start-up Swarm Technologies

SpaceX from Elon Musk acquires small satellite data provider Swarm Technologies, bringing together the startup’s 30 or so employees and its network of 120 tiny satellites. The deal, struck last month, is extremely rare for SpaceX, which normally manufactures its rocket and satellite hardware in-house or hires contractors.

Swarm disclosed the acquisition plans in an August 6 filing with the Federal Communications Commission which requested approval to transfer ownership of its satellite and antenna licenses to SpaceX. The merger agreement, in which Swarm will become a direct and wholly owned subsidiary of SpaceX, was signed on July 16, according to the filing.

The acquisition of Swarm marks a rare business move for SpaceX as it deepens its foray into the world of consumer electronics and pushes its way out of a chasm of non-profitability with Starlink, in the hope to eventually turn the network into a cash cow to fund Musk’s massive Starship launch system. It’s unclear, however, what specific opportunity SpaceX sees in Swarm for the benefit of its broadband network. A Swarm spokesperson declined to comment on the deal and SpaceX did not respond to a request for comment.

The acquisition will strengthen “the combined companies’ ability to provide innovative satellite services that reach unserved and underserved parts of the world,” Swarm wrote in the FCC filing. “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.”

Image: Swarm Technologies

Founded in 2016, Swarm provides ultra-low bandwidth data services using its tiny, sandwich-sized SpaceBEE satellites that communicate with smaller consumer ground antennas called “Tiles”. Of the 150 planned, 120 satellites are already in orbit and the tiles can be installed as chips the size of a cracker inside, for example, the circuit board of a device. With built-in GPS, devices with a tile installed can be tracked, relay data from sensors, or do whatever the customer programs using tiny pings of bandwidth to Swarm’s global satellite network starting at $ 5 per month .

SpaceX’s very different Starlink program aims to bring broadband internet to rural areas that lack fiber or physical internet connections. The company already has more than 1,700 of its initial tranche of 4,409 low Earth orbit satellites with nearly 100,000 beta users, most of whom paid $ 499 for a terminal kit and $ 99 per month for the Internet. The network is far ahead of competition from UK-backed OneWeb, which has so far launched 254 satellites for its similar, but smaller, broadband network and Amazon’s nascent Kuiper network, which does not ‘has yet to deploy any satellite.