Last Week in Earth Observation: July 3, 2023

Welcome to a new edition of ‘Last Week in Earth Observation’, containing a summary of major developments in EO from last week and some thoughts on the sector I have come to love.

In this edition: state of deforestation, wildfire monitoring, global building footprint, outdated flood data and a breakdown of EO investments in 2022.

Four Curated Things

Major developments in EO from the past week

1. Contractual Stuff: Funding, Contracts and Deals 💰

• German startup Airmo, which plans to launch a constellation of satellites with atmospheric lidar instruments for monitoring greenhouse gas emissions, closed a seed round of $5.7M;
• Spire Global signed a contract with OroraTech to build, launch and operate 8 thermal imaging satellites, with OroraTech developing the infrared sensors;
• Climate risk analytics firm Cervest, which had raised over $36M in funding and used insights from EO data, has gone into administration (insolvency);
• NASA awarded a contract valued at $70M to the University of Alaska for the continued development and operation of the SAR Distributed Active Archive Center as part of the Earth Observing System Data and Information System;
• The Australian government has scrapped its plans for the high-profile, $1B national EO mission, that was announced in 2022.

2. Strategic Stuff: Partnerships and Announcements 📈

• First Street Foundation, a US-based non-profit published new research that claims that the federal flood data is outdated and that major decisions are being made with models that do not account for climate change;
• Hyperspectral satellite company Pixxel signed an MoU with India’s Mahalanobis National Crop Forecast Centre to develop geospatial solutions leveraging its proprietary dataset;
• Virtus Resources Partners, a Swiss-based independent energy trading group will be collaborating with weather startup Jua on developing an AI-based high-accuracy weather model for energy trading;
• Microsoft released a global dataset that contains building footprints for over 1.2B buildings along with building height estimates for over 174M of them, leveraging imagery from Maxar, Airbus, and IGN France.

3. Interesting Stuff: More News 🗞️

• Data from the EU’s Copernicus Atmosphere Monitoring Service have shown that the wildfires in Canada have released more carbon dioxide in the first six months of 2023 than in any full year on record;

• China’s CG Satellite, which has launched dozens of EO satellites and plans to launch over 300 of them, announced that it demonstrated space-to-ground, high-speed, laser communications that would enable faster data downlinks;

• The world’s toughest regulation on deforestation came into force last week that would require companies to prove the origin of seven commodities imported into the EU (which would not be possible without EO data);

• Sticking with the topic of deforestation, the latest report from the World Resources Institute (WRI), showed that the world’s tropical primary forests shrunk 10 per cent more last year, compared to the previous year1.

  

4. Click-Worthy Stuff: Check These Out 🔗

• This white paper on the role of low-code tools in Earth observation, which I produced in collaboration with the EO startup, EarthBlox.

Subscribe for more Earth observation insights!

One Discussion Point

Analysis, thoughts, and insights on developments in EO

5. Breaking Down Investments in EO in 2022

A few weeks ago, space industry analyst Filip Kocian released the 2022 Space Funding Dynamics report that consolidated over 150 transactions including funding rounds, acquisitions etc. across the space industry2. As I had long wanted to do something similar focused specifically on the EO sector, I teamed up with Filip to analyse the EO-specific transactions from 2022. We also managed to include some deals from China, thanks to inputs from Blaine Curcio of Orbital Gateway Consulting.

Why do this?

Simple - I just wanted to understand the realistic state of private funding in EO. There has been a lot of talk about how much space companies have raised, whether we have peaked and so on, but I am yet to come across a report that is only focused on EO. As I have shared previously, EO is the segment with the highest number of VC deals in the space industry, but why does it not get the attention and analysis it deserves? I wanted to change that. So, this analysis below is a teaser of what is to come.

Some disclaimers

• The analysis is based on the TerraWatch EO value chain, which is included in the figure for convenience:

  • Things are pretty straightforward for Data, Platform and Analytics layers, somewhat straightforward for Insights and not straightforward for the Application layer, as it is incredibly hard to track down all companies using EO data (we have tried our best);

  • Companies in the fringe, which include companies in the space industry supplying components or subsystems, for whom EO is just another market segment are not included in the analysis.

• Transactions include equity investments (venture capital funding rounds) and do not include debt funding, government contracts or grants.

  • M&A transactions, of which there were at least a few (Advent acquiring Maxar, Planet acquiring Salo Sciences, Antarctica Capital acquiring Descartes Labs) are not included.

• Obviously, the list of transactions may not be exhaustive and may have omitted a few transactions (some on purpose, some by accident). In any case, we have tried our best to be as exhaustive as possible.

  • If you want to get access to the raw data, then shoot me a note. I will be publishing a ‘subscriber-only’ piece with more analysis and insights on EO investments in 2022 and the first half of 2023. So, for more, please subscribe to the premium version of this newsletter.

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Investments in Earth Observation 2022 - by Segment

The total investments in EO for 2022 were estimated to be $1.49B, with Data and Application totalling over 85 per cent of the overall funding raised. Note that the Application layer may have more transactions that have not been included, but data for the other layers should be close to reality.

My takeaway: We need more effort and money spent on making EO accessible, usable, fusable and analysable. The magic (of returns) is not a consequence of just launching satellites and acquiring data.

Investments in Earth Observation 2022 - by Vertical

Over 40 per cent of investments were targeted at companies that are fundamentally horizontal in nature, not verticalised like the rest of the investment. This can be attributed to the multi-purpose nature of EO in itself, but we could use more focused, use case-specific companies that are aimed at solving a specific problem, rather than building a horizontal solution that could potentially solve many problems.

My takeaway: Many bets on vertical agnostic companies which may need to inevitably verticalise, at some point, to have a scalable go-to-market strategy - unless, of course, they are confident that can go in different directions.

Stay tuned for more analysis on the state of EO investments, from the first half of 2023!

Scene from Space

One visual leveraging EO

6. Spotting Wildfires from Space

Can you spot the thin, feathery blue cloud in the centre of this satellite image?3 That is smoke from the Canadian wildfires, which has travelled across the Atlantic and Europe and is now stretching from Afghanistan to Lake Baikal in Russia - meaning the smoke covers an area of more than 1 million sq. km!

And, if you want to see more of such visuals with satellite imagery, I suggest you follow Simon Proud.

One (Last) Podcast Episode

This will be the last episode TerraWatch Space podcast, for a while, as I will be taking a break from podcasting

7. EUSPA: The European Union Agency for the Space Programme and its role in Earth Observation

In this episode, I am speaking with Chiara Solimini, Space Downstream Market Officer at EUSPA, the agency that manages the space programme of the EU.

In this episode, we discuss what EUSPA is and its activities, the role of EUSPA in promoting the use of data from the Copernicus programme, the European Green Deal and how Copernicus enables its implementation, how EUSPA encourages research and entrepreneurship and more.

If you don't know much about EUSPA and want to learn more about how it can support your company or research project, then this episode is for you.

Until next time,

Aravind