Emposat’s Funding Round Highlights Growth Areas for Telemetry, Tracking, and Command
Oftentimes when people think of the emerging commercial space sector, two things come to mind: rockets and satellites. This is not surprising, as there are few things as electrifying as seeing a rocket blast off into orbit, and few things as mesmerizing as watching satellites be deployed into the expanse of space, only to fall into predetermined, orderly orbits where they will stay for their short but exciting lives.
Often overlooked, however, is the ground segment: how to control these rockets and satellites, how to communicate with them once they’ve left the earth, and how to manage global networks with global data uplink and downlink requirements. The answer, of course, is to use teleports: open areas where service providers build a handful of gateway terminals to control satellites and transmit data to them. This is collectively referred to as telemetry, tracking, and command (TT&C).
The gateway service provider business is one based on scale and accessibility, where having larger, global networks is typically better than smaller and more localized ones. By virtue of having had a largely domestic space sector, China’s ground infrastructure is primarily concentrated within country, but as we’ve seen, commercial companies have been making headway in expanding China’s gateway network globally, with none as prominent as commercial TT&C company Emposat, formerly known as Satellite Herd.
A commercial player with global ambitions
Emposat was founded in late 2016 by a team of former CASC employees. From its beginnings, Emposat’s core business has been providing TT&C services to commercial satellite operators. Such a business model is typically billed on a “cost per pass”, that is, for each time a satellite operator’s satellite passes over Emposat’s gateway and sends or receives data, they would pay, typically some tens of US dollars up to a couple hundred dollars per pass. While that may not sound like much, the numbers start to add up pretty quickly given that each satellite can have multiple passes per day, and Emposat serves 266 satellites (as of June 2023.)
In the seven years since its establishment, Emposat has clearly recognized the importance of overseas ground stations for its business model. First, in April 2020, Emposat established a French subsidiary, SatHD Europe. Today, this subsidiary is believed to manage most of Emposat’s international efforts, which has included building multiple gateways outside of China. In mid-2021, the company announced a collaboration with Azerbaijan’s Azercosmos to deploy a 4.2-meter antenna at Azercosmos’ ground station in the Absheron peninsula near Baku. Around the same time, Emposat announced plans to install a ground station with “4-6 antennas” in the southern part of Argentina. At the time, the move was met with some controversy due to the potential to monitor the Antarctic. Emposat’s website claims that the company also has ground stations in Kenya, South Africa, Malaysia, the Philippines, and Thailand, though these projects have not been publicized in the same way that the Argentina and Azerbaijan ones were.
In addition to its network of ground stations, Emposat offers several other services, including constellation management software and calibration for remote sensing satellites, as well as communication products developed in-house including antennas and baseband equipment. Overall, Emposat has clearly had a busy seven-ish years since establishment, setting up a network of ground stations and developing a variety of technologies and products. The company’s recent funding round is an indication that they may just be getting started.
That’s a big check: $30 million for TT&C growth
Earlier this month, Emposat completed a “nearly ¥200 million” (~US $30 million) Pre-B round of funding, boosting the total funds raised by Emposat to some ¥500 million. The funding came from a variety of sources, but was led by the Zhongguancun Science & Technology Town Fund, associated with the Beijing Municipal Government. Other participants in the funding round included VCs with links to city governments in Ningbo and Taicang, on China’s eastern seaboard. The funding round comes in a period of rapid organic and inorganic growth for Emposat, and during a time when the company is diversifying its business.
During a February 2023 visit to the company by your correspondent, we learned that Emposat has grown to roughly 250 employees. This number was apparently boosted by the 2022 acquisition of an unnamed data analytics company with the aim of diversifying downstream into data downlink and analysis. Among other applications, this could mean collecting remote sensing data from a variety of satellites (via Emposat’s gateways), analyzing the different sources of data, and selling an end customer’s insights derived from the data; for example, a provincial government might want all the data on their province’s agricultural sector so that they can better plan harvests and farmer assistance.
After the funding round, we should expect to see Emposat pour more money into this downstream business. By most accounts, Emposat is already the dominant commercial TT&C service provider: More than half of Chinese commercial satellites use Emposat for their TT&C. China is likely to launch a lot more satellites moving forward, but Emposat is already well-known in this part of the market, and regardless, the market is fairly finite. On the other hand, downstream data analytics, a realm in which Emposat is vastly less well-established, is a vastly larger market. This is likely to create some issues, not least of which is the fact that Emposat would be competing with a subset of their own customers. For example, a remote sensing satellite operator may be reluctant to pay Emposat for TT&C/downlink services when it knows Emposat might go to the same end customer and try to sell data to them.
What to expect moving forward?
Emposat has jumped out to a massive lead in China’s commercial TT&C market, commanding over half of the market share and boasting the most global network by far of any commercial TT&C player in China. Bolstered by several funding rounds and solid commercial business since its founding, the company is in the driver’s seat when it comes to winning TT&C business from commercial satellites in China.
In the future, we are likely to see Emposat expand in several ways. First, we will see more gateways built in other far-off places like South Asia or Sub-Saharan Africa. Second, we may see Emposat push further into data downlink and analytics. With over 250 satellites being served by the company today, and with China launching dozens of satellites per month, the quantity of data being gathered from space is rapidly growing to an immense scale. As a company with lots of gateways that can uplink, downlink, and analyze data, Emposat is in a very good position in this growth market. Finally, we are likely to see Emposat push into more comprehensive downstream services, such as selling analyzed data and insights to end customers.
Increasingly, these business models are likely to roam into sensitive territory. Overseas ground stations, particularly in Europe or the Americas, can be seen rightly or wrongly by western countries as an expansion of China’s influence into these regions. High-volume data downlink and analysis, particularly of sometimes sensitive remote sensing data, can quickly catch the attention of regulators. And attempting to buy Chinese-built communications equipment such as basebands and antennas is likely to become more complicated for western customers.
Ultimately, Emposat’s recent funding round is going to give the company more ammunition to fund market expansion across a variety of verticals. Being a “commercial” company will likely allow Emposat greater room to maneuver through increasingly sensitive industries, and their dominant position in the Chinese TT&C market will give them a strong foundation. In the meantime, gateway operators should be on the lookout, because Emposat could be coming to a country near them sooner rather than later.
