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Astranis satellite
An artist’s conception shows an Astranis satellite in geostationary orbit. (Astranis Illustration)

Astranis Space Technologies is taking the wraps off a plan to provide internet access to billions of people, using small-sized, low-cost satellites that are lofted into high-flying orbits.

The San Francisco-based venture emerged from stealth mode today and reported a $13.5 million Series A investment round, led by Andreessen Horowitz with additional participation by Y Combinator, Fifty Years, Refactor Capital and Indicator Fund.

The new investment brings Astranis’ total funding to $18 million. That may sound like a lot — until you consider that aerospace heavyweights such as SpaceX and OneWeb are spending billions of dollars pursuing the same goal.

The competition doesn’t faze Astranis CEO and co-founder John Gedmark, an aerospace engineer who previously served as executive director of the Commercial Spaceflight Federation.

“We are huge fans of what SpaceX and OneWeb are doing,” he told GeekWire. “This is such a massive problem that we need a whole array of approaches.”

Like SpaceX and OneWeb, Astranis is aiming to put up satellites capable of providing broadband internet access to the estimated 4 billion Earthlings who can’t get it today.

“It is not just a problem in the developing world,” Gedmark said. He noted that hundreds of thousands of people currently lack broadband access in Kentucky, the state where he was born and raised.

To fill the gap, SpaceX and OneWeb intend to put thousands of satellites in low Earth orbit, a feat that will require lots of launches to get the constantly moving constellation up and running.

In contrast Astranis plans to send one satellite at a time to slots in geostationary orbit, 22,000 miles high, where each satellite can beam data up and down on a steady basis.

“We can get started with just one satellite,” Gedmark said.

Astranis' McLinko and Gedmark
The founders of Astranis are CTO Ryan McLinko, left, and CEO John Gedmark. (Astranis Photo)

Seattle-based Spaceflight arranged for the stealthy launch of Astranis’ first prototype satellite to low Earth orbit aboard an Indian PSLV rocket in January, and Gedmark reported that a data transmission test was conducted successfully on Feb. 15.

He said two high-definition video files were sent up to the satellite from a ground station in Alaska, digitally processed in real time using Astranis’ proprietary software-defined radio technology, and sent back down. (RBC Signals, a startup based in Redmond, Wash., arranged for the ground services in Alaska.)

One of the videos was a clip showing the PSLV launch, Gedmark said. The other clip documented tennis star Roger Federer’s recent win at the Australian Open — which Gedmark said was chosen because the engineer who was in charge of Mission Control at the time is a big tennis fan.

With Spaceflight’s assistance, Astranis plans to have its first operational satellite sent to geostationary Earth orbit, or GEO, sometime next year, Gedmark said.

He said the 300-kilogram (660-pound), 3-foot-wide satellite could be launched as a secondary payload on any of several types of rockets, ranging from SpaceX’s Falcon 9 to United Launch Alliance’s Atlas 5 to the European Ariane 5.

Astranis size comparison
Astranis’ MicroGEO satellite is about the size of a mini-fridge. (Astranis Graphic)

Eventually, Astranis aims to mass-produce satellites at its 13,000-square-foot facility in the San Francisco area. The company currently has about 20 employees, “and we’re hiring,” Gedmark said.

He said the key to success lies in being able to provide GEO data services using satellites that weigh mere hundreds of pounds rather than tons. “These satellites are tens of millions of dollars, as opposed to hundreds of millions — and that’s a game-changer,” he told GeekWire.

The satellites would serve operators who already have highly prized GEO slots reserved. Gedmark said “we have a long list of interested customers,” but declined to list them.

The potential end users could range from smartphone owners on a data plan, to cable subscribers in homes and schools, to airplane passengers using in-flight WiFi. But because services would be sold wholesale to satellite operators, those users may not even know that Astranis is boosting their broadband.

“We’re just adding to the world’s supply of satellite bandwidth,” Gedmark explained. “It means more bandwidth to go around.”

One of the well-known drawbacks of GEO broadband is the issue of latency — a lag in transmission time that can amount to 120 milliseconds each way. “That is the tradeoff,” Gedmark acknowledged.

That time delay can be a killer for applications that require lightning-fast responses, such as video gaming and high-frequency trading. This is why so much attention has been paid to LEO broadband, which reduces latency to negligible levels. But Gedmark insisted that Astranis’ MicroGEO platform would work just fine for most applications, including video streaming.

“Around 95 percent of data traffic is not latency-sensitive,” he said.

Astranis’ tech team is led by co-founder and chief technology officer Ryan McLinko, a veteran of space ventures ranging from Planet and Sierra Nevada Corp. to SpaceX and United Launch Alliance. Gedmark said other engineers have come to the team from Google, Qualcomm, SSL and Orbital.

Today’s announcement of the Series A funding round identified two new members of the extended team. Dan Berkenstock, the founding CEO of Skybox, will serve as a board observer. Martin Casado, a general partner at Andreessen Horowitz, has joined Astranis’ board.

In a blog posting, Casado noted that Astranis was chosen to receive Andreessen Horowitz’s first investment in the space industry.

“We feel very privileged to be able to share the vision and passion of this team, and to be their partners as they change the world — by connecting it,” he wrote.

Correction for 9:40 a.m. PT March 1: The original version of this report erroneously said Astranis’ test satellite, DemoSat-2, transmitted data at the rate of 10 gigabits per second. That’s the anticipated throughput for the first GEO satellite that the company hopes to launch next year.

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