Welcome to a new edition of ‘Last Week in Earth Observation’, containing a summary of major developments in EO from the last week and some exclusive analysis and insights from TerraWatch.
Four Curated Things
Major developments in EO from the past week
💰 Contractual Stuff: Funding, Contracts and Deals
Funding
- Indian software firm Infosys has invested $2M in EO startup GalaxEye Space, which plans to launch a satellite constellation equipped with multispectral and SAR instruments;
- SAR analytics firm SATIM has raised a funding round that could see the startup allocated up to €7M in follow-on rounds;
- Brightband, a weather forecasting startup, has raised $10M in Series A funding to build tailored models for verticals such as insurance, finance, agriculture, energy, and transportation.
Contracts
- Planet has signed a three-year contract with the German Space Agency DLR to supply EO data and services;
- Capella Space wins a contract from the US Air Force worth $15M for a radar imaging upgrade;
- Lockheed Martin was awarded a contract worth $297.1M by NASA (on behalf of NOAA) to supply lightning mappers for its future geostationary weather satellite constellation, GeoXO;
- BlackSky was awarded a seven-figure contract by HEO, an Australian startup specializing in non-Earth imaging and analytics, for whom BlackSky will provide imagery of objects in space for space domain awareness.
- BlackSky is the second major EO firm, following Maxar, to venture into the increasingly lucrative domain of space domain awareness.
📈 Strategic Stuff: Partnerships and Announcements
Announcements
- Google is investing $13M in an initiative led by the Earth Fire Alliance to launch the FireSat constellation in partnership with EO firm Muon Space and the Environmental Defense Fund;
- Australian hyperspectral satellite startup Esper has seen its revenues grow to more than $10M, despite the failure of its first satellite and their utilizing a near-infrared sensor from a partner’s satellite already in orbit;
- Defense firm Anduril announced plans to launch satellites starting in 2025, including remote sensing payloads and on-orbit processing technologies.
Partnerships
- NOAA and Esri are partnering up to create the prototype for a fully interoperable open data platform to provide equitable, actionable, and ready-to-use ocean and coastal data for decision-makers and communities;
- UAE-based AI firm G42 is teaming up with NVDIA to develop AI solutions to enhance the accuracy of global weather forecasting;
- Infrastructure investor Equitix and EO-based climate risk analytics provider Sust Global are partnering to monitor wind energy generation assets;
- Santa Clara County FireSafe Council, a non-profit from California, has signed a strategic partnership with EO-based wildfire monitoring firm OroraTech, which will see the former become a reseller of its solution in the state.
🗞️ Interesting Stuff: More News
- NASA is collaborating with the US State Department to provide air quality updates to staff across 270 US embassies globally;
- A new report that used EO, among other sources, reveals that human activities are responsible for at least two-thirds of global methane emissions.
- August 2024 set a new monthly temperature record, capping Earth’s hottest summer since global records began in 1880, according to NASA;
- NOAA released the first images from the GOES-19 geostationary weather satellite launched earlier this year.
🔗 Click-Worthy Stuff: Check These Out
- This paper, which provides a methodology for estimating aboveground biomass using space-based lidar data from the ICESat-2 mission;
- This collection of the global AI-based weather forecasting models;
- This article that details the efforts required to perform ground truth verification exercises that is crucial for estimating biomass using EO;
- This report on the economic valuation of Landsat and Landsat Next programmes, including qualitative and quantitative benefits of the data.
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One Discussion Point
Exclusive analysis and insights from TerraWatch
Analysing Planet's Revenues: The Declining Share of the Commercial Segment
When Planet went public through a SPAC transaction in 2021, the company promised an explosion in uptake and, therefore, revenues from the commercial sector for non-defense use cases. Planet forecasts that its revenue share from the commercial segment will grow from 54% of total revenue in 2021 to 68% by 2026.
However, the reality has proved to be different—Planet's revenue share for the commercial segment decreased to 33%, according to their Q2 2024 earnings report, down from 40% in Q2 2023 and forecasted to be around 23% for Q2 2025.
Why hasn't the EO commercial segment picked up?
Payload recently published a piece analyzing this, in which I am quoted. Here is an expanded version of some of my thoughts on why Planet’s revenue share from the commercial sector is decreasing while revenues from the defense and intelligence (D&I) sector continue to grow.
Validated vs. Assumed Needs
There are more validated needs for satellite imagery in the D&I sector (as a historical user), whereas, for the emerging commercial use cases, these are only assumed needs. As we discuss below, some of the remote sensing needs are satisfied by open data. Affordability and usability, as we discuss below, are crucial factors. In addition, EO has a long sales cycle with the added problem of compounding value over time. So, it’s harder to pick up large contracts in a short time.
Open vs. Commercial EO Data
EO is a relevant tool for many commercial use cases (which are growing as we speak), but open data (Sentinel, Landsat, MODIS, etc.) is sufficient for roughly 80% of those applications, while commercial satellite data is a real value-add for the remaining 20%.
So, while the fundamental assumption of EO being a critical component was not incorrect, the assumption that commercial data (like Planet) is a big part of the addressable market might have been overestimated. Defense does not have this problem, as the likelihood of open data fulfilling the needs of D&I is low.
Affordability and Usability
While the prices of commercial satellite imagery (including from Planet) have been decreasing in the past few years, they have not been reduced enough to warrant large-scale adoption in the commercial sector. Defense budgets have, however, been increasing, primarily due to the changing geopolitical situation.
Further, a lot of effort is still needed to make EO data usable for the commercial sector, i.e., converting it to an analysis-ready format or delivering it as analytics. Planet has probably already identified the challenge of usability and invested in developing its capabilities in-house—see the acquisitions of Sinergise (to enable better data dissemination and processing) and VanderSat and Salo Sciences (to enable the delivery of analytics/data products, aka Planetary Variables).
Future of EO
As I have always said, the future of EO is multimodal, i.e., the value to be delivered for commercial customers will likely be a combination of data from multiple sensors—even Planet has invested in a new modality (hyperspectral with Tanager). In various market verticals, it is difficult for one sensor/company to win it all. So, we will start seeing more partnerships and acquisitions for going to market in the commercial sector.
On the D&I front, I am very bullish as the addressable market continues to grow (as evidenced by Planet's contracts with NATO and other international customers). So, unsurprisingly, Planet, like most of the EO sector, will focus on short-term wins in the D&I sector while continuing to invest slowly in the commercial applications—where there is undoubtedly a lot of potential.
Scene from Space
One visual leveraging EO
First Images from Sentinel-2C
The Sentinel-2C satellite, launched on September 5th as part of Europe's Copernicus programme, has sent its first images back to Earth. While the mission is not fully operational, as the instruments are being calibrated, the first images show that Sentinel-2C will soon be ready to replace the Sentinel-2A satellite.
The image shows the Lighthouse Reef off the coast of Belize in Central America, including the famous Great Blue Hole, a giant marine sinkhole.
Until next time,
Aravind.