Satellite Launch

Cheap Satellites for the World

IndiaRocketLaunch-Antrix-ISRO
Berlin Space Technologies is charging only €5 million for its satellite, including the rocket launch.
  • Why it matters

    Why it matters

    German engineer Tom Segert and his company, Berlin Space Technologies, are carving out a new niche in the aerospace industry by offering satellites to private industry and emerging economies.

  • Facts

    Facts

    • The company’s first satellite launch took place in India on Wednesday. The satellite, the Kent-Ridge-1, was launched from a peninsula in southeastern India.
    • The satellites cost only €5 million, instead of the typical €40 million for similarly-sized satellites.
    • Mr. Segert and his partners have managed to run their startup company without venture capital or borrowed funds.
  • Audio

    Audio

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When the PSLV-C29 rocket lifted off on its flight into the universe on the Sriharikota Peninsula in southeastern India on Wednesday, it was carrying a payload of both technology and dreams.

One of those dreams is that of the nation of Singapore, which is indulging in its own space mission to celebrate the 50th anniversary of its independence, and to showcase the country’s progress and achievements.

And then there is the dream of Tom Segert, a 36-year-old engineer and entrepreneur from Berlin.

His startup built the Kent-Ridge-1 satellite, which PSLV-C29 will transport into space. It will photograph the world from above on behalf of the National University of Singapore.

If the launch is a success, Berlin Space Technologies will have completed a big step on the road to Mr. Segert’s goal: to compete with the big players in the aerospace industry with a company of only 24 people.

The impressive aspect of the Berlin Space Technologies satellite is its price. In the traditional aerospace industry, a satellite weighing 80 kilograms (176 lbs.), costs about €40 million, or $43.7 million, said Mr. Segert. This is only affordable for large, state-run aerospace agencies like Europe’s ESA or NASA in the United States.

Berlin Space Technologies is charging only €5 million for its satellite, including the rocket launch. The target market consists of emerging economies like India, city-states like Singapore, and private industry.

With their inexpensive satellites, Tom Segert and his co-founders, Matthias Buhl and Björn Danziger, are part of a new generation of aerospace companies with streamlined structures and pragmatic approaches – companies that aim to make space accessible to everyone.

Gerd Gruppe, a member of the executive board of the German Aerospace Center, is pleased that small firms are challenging larger companies and making space accessible for more and more purposes.

“If the Segerts of the world prevail,” said Mr. Gruppe, “demand will grow and prices will decline. This is gut for space travel.”

If it takes someone like Russian President Putin to stop them, they must be doing something right.

There’s a massive potential market out there for what Mr. Segert is selling. According to the Satellite Industry Association, the industry grossed $203 billion (€185 billion) last year, compared to $144 billion in 2008.

Well over half of all proceeds were generated in the United States, which is also home to prominent representatives of the new generation of private aerospace companies, including Tesla founder Elon Musk’s SpaceX, which offers rocket flights for private industry.

Emerging economies in Asia, the Middle East and Africa are also feverishly working on their own space projects. In addition to promising prestige, they are also intended to solve environmental problems and improve infrastructure.

Although complex research projects still require the highest security standards, Mr. Gruppe said a more pragmatic approach – like that of Mr. Segert – is certainly appropriate for smaller ventures.

 

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Tom Segert is part of a new breed of aerospace engineers. Source: Pablo Castagnola for Handelsblatt.

 

It all began with the dream of a collapsible space telescope. Mr. Segert and Mr. Danziger, who were fellow students at the Technical University of Berlin, received a €250 award for their design at the Berlin Symposium on Small Satellites. They used the money to buy another old telescope and a pair of bicycle inner tubes from a junkyard.

The model brought them recognition but hardly any money, which is why they turned their attention to building satellites. However, they remained true to their approach, which is pragmatic, simple and economical.

The founders initially worked on smaller projects, like a star camera they built for a Canadian company, which is now being used on the International Space Station (ISS). Kent-Ridge-1 is their first satellite, and they are already developed a second one for a client in the Middle East.

“If the Segerts of the world prevail, demand will grow and prices will decline. This is gut for space travel.”

Gerd Gruppe, German Aerospace Center

In the past, only two large companies in Germany were involved in the production of complete satellite systems: Airbus and OHB, a family-owned business in the northern city of Bremen.

Mr. Segert is sitting in a plain office kitchen in the Adlershof technology park. He places three seemingly identical chocolate bars on the table. “If you buy components for the ESA, it isn’t enough to test one or two to make sure that the batch is ok,” said Mr. Segert. Instead, he explains, you have to buy 100 units and destroy 21 of them, which is what makes the end products so expensive.

Berlin Space Technologies offers customers an 80-percent guarantee quota for its satellites. This is too low for the major aerospace agencies, which require a guaranteed quota of close to 100 percent. But the last 20 percent are the most expensive, Mr. Segert explains. And at his prices, he adds, customers can also buy a replacement satellite should the first fail.

Another reason for high costs in the aerospace industry is that quantities are so small. A rotation unit, to which a satellite can be attached to make all sides accessible, costs about €100,000, says Mr. Segert. But similar devices can be found in any car repair shop. The Berlin entrepreneurs found one for €2,500, which they easily had rebuilt to suit their needs.

How do three students hit upon the idea to question a system based on decades-long structures, a system dominated by established companies with much larger workforces?

None of this intimidates Mr. Segert, who grew up in East Berlin. He was 10 when the Berlin Wall came down. And he remembers sitting at the table when his parents, professors of philosophy and sociology, were talking about the demise of the entire communist system.

“When you see how a state can disappear, you lose respect for institutions,” he said. A society is nothing but a dream dreamt by many, he adds.

Perhaps most amazingly, Berlin Space Technologies hasn’t received a cent of venture capital to date, nor has it taken out any loans. The founders are funding everything with current income.

They expect €4.5 million in revenues for 2015, which is twice as much as in the previous year and almost 100 times the amount of money they earned in 2012. It took a tremendous effort on the part of Mr. Segert to convince customers to pay him before the satellite was finished.

There were also multiple setbacks. One happened in 2011, when a contract with a Russian customer fell through at the last minute. They had negotiated for two years with then President Dmitry Medvedev. Then Vladimir Putin became president again. The man in charge of the Russian company was replaced, and the new boss wanted nothing to do with the project.

Mr. Segert spent a few days at the beach to blow off steam, and then he became pragmatic again. “We failed once every year,” he said, “but it was also a bigger project each time.”

Besides, he added, if it takes someone like Russian President Putin to stop them, they must be doing something right.

 

Miriam Schröder is based in Berlin and is covering the city’s start-up scene. To contact the author: schroeder@handelsblatt.com

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