Massive news was announced earlier today - Skykraft has raised $120m - the second largest raise in Australia this year. In my opinion, Skykraft is on track to become a $1bn+ business and the anchor of the Powerhouse (PVL) portfolio in the same vein as SiteMinder has done for Bailador. This is likely to have multi-bagged Skykraft's valuation... Will be interesting to see where the PVL NTA lands, I suspect it may have risen from 8.9c/share to closer to 10c/share... Compared to a current share price of sub 5c.
Exclusive
Big money is back as space tech start-up raises $120m
Paul Smith
Technology editor
Oct 16, 2023 – 11.00am
Big money is back as space tech start-up raises $120m
Paul SmithTechnology editor
Oct 16, 2023 – 11.00am
In a sign that big money investment is returning to the Australian start-up scene, Canberra-based space technology specialist Skykraft is set to lift off for the stars, after banking $120 million to fuel its ambitious aviation satellite vision.Skykraft has designed and built satellites to improve communications between air traffic control and aircraft flying over remote areas, and has spent two years raising the funds needed to get a constellation of hundreds of its satellites into low-earth orbit.
Skykraft CEO Dr Michael Frater stands in a workshop with one of SkyKraft’s satellites.Skykraft CEO Dr Michael Frater has now raised enough capital to get a full constellation of satellites up into orbit.
The company’s chief executive, Michael Frater, told The Australian Financial Review the lengthy capital raising process was needed to find the right profile of investor, who could understand and value the firm like a transport infrastructure company, rather than viewing it through the lens of technology and space.“While there is lots of tech in what we do … we have had to explain to investors that what we are doing has all the important characteristics of other infrastructure investments,” he said.“We are dealing with customers that have high credit ratings, it’s a market with long-term contracts – it’s just that we are building infrastructure in space, rather than what investors associate with infrastructure, like concrete and steel on the ground.”
Alongside CSIRO-backed Australian deep technology venture capital fund Main Sequence Ventures, other major investors in the funding round were Foresight Australia, the local subsidiary of the UK-listed fund manager, and OPTrust, one of Canada’s largest pension funds.Dr Frater declined to reveal the valuation the funding round had been struck at.
In an era of relatively conservative funding rounds, compared with the 2021 peak, Skykraft’s represents the second-largest round in Australia so far this year. Cut Through Venture data shows medical device company Saluda Medical secured a $150 million equity round in April, with the other largest deals being Loam Bio’s $105 million in February, and Secure Code Warrior’s $US50 million ($73 million) in July.
The start-up had previously raised a $3.5 million round from investors including former Macquarie Group boss Allan Moss, Lennoxgrove Capital and Adcock Private Equity.The company’s satellites are designed and manufactured in Australia, before being sent into orbit on SpaceX rockets. Its first batch was successfully launched in January, and a second load went up in June.
It plans to build a global air traffic management service, where it will provide constant real-time communications to aircraft between air traffic controllers and pilots, and enable more energy efficient and safer flight path planning.In circumstances such as the disappeared MH370 flight in 2014, which was never found after it went off radar, Dr Frater said a satellite system would have been able to answer some of the questions.“This will provide global coverage, so it means that where there is an incident like that, we will be able to track the plane, and at least we would know where it came back down to ground,” he said.
Skykraft’s latest funding will be sufficient to sustain the company until it has deployed its full constellation of satellites, and revenue starts rolling in from clients to sustain it. But Dr Frater said he was open to taking on a further $10 million in external investment.
Main Sequence partner Martin Duursma said he believed Skykraft’s expertise in designing, building and operating satellite constellations would enable it to provide services that replace legacy systems in the aviation industry globally.“Skykraft is doing truly groundbreaking work that has the potential to transform aviation communications infrastructure,” Mr Duursma said. “By reinventing transport infrastructure from the ground up using space-based platforms, they can increase air safety and address the gaps in surveillance and communications over oceans and remote regions.”