Small satellite manufacturer Terran Orbital went public with its listing on the New York Stock Exchange on Monday, March 28, after closing its SPAC merger. The company trades under the ticker LLAP, meaning “live long and prosper”, a reference to the Vulcan greeting in Star Trek, with shares previously listed under the special purpose acquisition company Tailwind Two Acquisition Corp.
Terran is the latest to join the bandwagon of Space companies going public through SPAC deals, including Planet, Rocket Lab, Satellogic, Astra among others.
The company currently has contracts to build satellites for customers including NASA and the Department of Defense, as its revenue backlog grew from USD 68 million as of September 30, 2021, to over USD 200 million today. Its revenues crossed USD 40 million in 2021, growing from USD 25 million in 2020.
Co-Founder and CEO Marc Bell noted that he was thrilled to bring forward Terran as a public company. “We expect that as we advance, Terran Orbital will continue to define the small satellite market by combining high-volume manufacturing with fully integrated operations and mission planning capabilities,” he said.
Bell also revealed that the company was also planning to build one of the largest and most advanced persistent earth observation constellations, in addition to its plans of building one of the largest vertically integrated satellite manufacturing facilities.
“Our innovative, cost-effective satellite solutions and real-time data offering are validated by our suite of marquee military, commercial and civil customers; an experienced, solutions-focused management team featuring former senior leaders in the US Air Force, US Navy, and US Army. As a public company, we expect to leverage our industry position to capitalize on the exponentially rising demand for small satellites and earth observation data to meet critical government, national security and commercial needs, support human Space exploration, and deliver long-term value to our partners and investors,” he added.
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Geospatial World caught up with Bell last week on the sidelines of the recently held Satellite 2022 conference in Washington DC.
Excerpts:
What prompted the decision to build your own satellite constellations?
We are predominantly a bus manufacturer, and we are payload-agnostic. We make all kinds of satellites, be it for 5G, Internet of Things, earth observation, synthetic aperture radar (SAR)… basically whatever the customer wants.
We realized we can leverage our fully integrated manufacturing capabilities to develop our own advanced NextGen Earth Observation constellation of small satellites to provide real-time earth imagery as a service. This opens up the range of customers far wider.
We will be launching two satellites in Q2 and Q4 of this year, and continue with the launches over the next few years. In 2023, we are predicting to have 14 launches. We have so far planned for a total of 96 satellites in the constellation. The sensors will be primarily SAR and electro-optical.
You mentioned wider customer base. What is the customer base you are targeting?
Our primary customer is the US government, mostly national security – defense and intelligence community. So that is what we care about. We don’t have any plans currently to enter the commercial sector.
I was also at the small satellite panel that you were addressing. What are some of the takeaway points from that discussion, you would say?
You still have a lot of people focusing on nano-sats and cubeSats, which is great. These are product demonstrators. It enables people to put in a toe in the water and see what you can do from Space. But to do the real work, the satellites need more power, better sensors, better battery life…
If you look at the small satellite industry, we have seen it drastically evolve in the past 10 years. Ten years ago, small sats were just an educational demonstrator. So, the small sat industry had to prove to the world that we could actually do something in a small form factor. Today, what used to cost a billion dollars, you can do for 10 million. What used to take eight to 10 years now takes 12 to 24 months. The whole basis of the satellite industry has changed, and that has opened up a lot of opportunities. There are things that you can now do in low earth orbit that just weren’t practical to do in the geosynchronous orbit earlier. And you could do all that at a much lower price point. The industry is evolving, whereas it was fairly stagnant for 25 years. You are seeing a lot of evolution.
Further, the industry has had great access to capital, and also there are so many launch options now. So that has made things easier.
However, we also need to look at options that are possible and practical. You see a lot of people out there trying to mine asteroids, and that’s not a sustainable business; that’s a gimmick. In time, such companies may go under, and you don’t want that kind of a Newspace business model. However, access to market also means the Wall Street is funding companies that never should be funded and never should go public. But it will clean itself out, just like in the past, and companies with practical and sustainable business models will succeed.
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If you were asked to pick, let’s say, the top three trends that is fueling this boom in the small sat industry, what would that be?
Decrease in launch price has made a big difference for the small satellite industry. Then comes increasing the bus size, which means more power. And then just the knowledge base of people, or, simply put, customer acceptance. More people now understand that Space is not that complicated.
Elon [Musk] made Space sexy; he made it popular and cool. Suddenly, everybody is paying attention to Space and everybody loves to watch a launch. Then you hear the US government say that 50,000 satellites are going to be built over the next 10 years. That will be people like us building those.
The Space and satellite industry has largely been pandemic proof. Amid a global economic slowdown we have seen the Space industry moving forward.
This is primarily because of people like us never closed. We were open all through the pandemic. We never sent people home because the type of work we do, you can’t do at home. We are part of a group of companies that are considered important for the national interest, so we continued to work.
Then we have also seen a sharp rise in demand for data. Today, more people are interested in seeing what all we can do with the data. People want data, just like you want 5G on your phone. Everybody wants more data, faster, better.
How do you see the market evolving two years down the line?
I see a big shakeout. We are going to see a lot of consolidation. There will be companies that will go down and people like us succeeding.
With so many companies going public, so much of competition happening…
It’s not that many companies that have gone public. It’s about like a dozen and a couple; and that’s it! Out of 30,000 public companies, I would say that’s a pretty small percentage. The industry is not even asset class yet. Eventually we are going to be an asset class, and we are getting there. One day, SpaceX will probably go public, and that will also help create the asset class of Space.
Where do you see Terran in the next two years?
We see ourselves growing to be a dominant player in the manufacturing of small satellites here in the United States. We solve problems with Space for our customers. I see Terran Orbital doing exactly what we are doing now. We will continue to manufacture buses, and we will continue to deliver solutions for our customers. Our manufacturing business is unique because it’s truly a recurring revenue business.
