It's Your Turn To Take Out the Trash

This is The Startup Breakdown, the newsletter where we breakDOWN startUPs (just had to make sure you appreciated the word play). By joining this growing community of dozens of interested people, you're getting firsthand access to my observations and opinions on the current state of startups and venture. If you'd like to receive these newsletters directly in your email once a week, go ahead and subscribe to never miss an email!

Happy Monday, folks.

Anybody have any idea what to pack for a summer on Mars?

These are the questions that Elon Musk, SNL actor and part-time CEO of Twitter, Tesla, and SpaceX is hoping you’ll be asking as the company inches ever closer to interplanetary travel capacities.

SpaceX completed a test of its aptly-named Super Heavy rocket booster, successfully igniting 31 out of 33 engines. Once attached to the actual craft, this will make Starship the most powerful rocket ever. I wonder how many of these puppies I can strap on my bike.

Musk hasn’t been shy about his interstellar ambitions, and the success of this test is a very large leap forward in achieving them. The next step will be an actual test flight, likely next month. By 2029, he’s predicting Mars.

Asking for a friend, what’s the better real estate investment, land on Mars or in the metaverse?

With the coming breakdown section also featuring a space company, today is heavy on the Star Wars content. Figured I’d plug one of my favorite Twitter accounts for following the (ugh) space @latestinspace

Don’t mean to speak too soon, but… are IPOs back?

Last year was historically bad for private companies interested in picking out stock tickers, with the number of public listings falling 45% to 181 deals and the money made in the process dipping an even greater 61%. This inspired a few notable unicorns to delay their plans, including Instacart and Stripe.

However, this year might see a strong bounce back, and as most good things are, it could be led by a lemon chicken hummus bowl.

Two fast casual chains have announced plans to go public this year, Cava and Panera. There are also numerous foreign companies seeking to access the American capital market after suffering the consequences of world leaders forgetting to send Christmas cards last year.

Finally, there’s a strong chance that the companies which delayed listing last year finally take the leap now that investors are a bit more interested. In addition to the aforementioned companies, other large tech firms like Reddit and Epic are considering writing up a prospectus.

Quick detour from the “everything sucked last year” narrative, but carbon capture investments hit a near-record $13.8 billion last year. It was still a touch below the $14.1 billion brought in the year before, but compared to the R-rated horror movie that was the broader venture scene, this 2% drop might as well have been a box of Trader Joe’s dark chocolate peanut butter cups.

Much of this strength can be attributed to the hot new trend in Silicon Valley for companies to reduce their carbon footprints. The difficulty in achieving this also increased last year as the war in Ukraine and subsequent sanctioning of Russian energy forced many European nations to risk black lung as they brought out their coal reserves.

With a much higher carbon footprint than even other fossil fuels, higher coal usage will make it even harder for companies to meet these climate pinkie promises. Go carbon capture!

Hope you enjoyed that happy news side quest. We now return to your regularly scheduled doom and gloom recap.

Other cleantech sectors weren’t quite so lucky. One particularly impacted industry, vertical agriculture, had a front row seat on the struggle bus, registering a 17% decline in fundraising YoY during Q3 of last year. The decline looks even more stark when compared to its trend at the time, though, where it fell 44% from the period prior.

Much of the decline can be attributed to the decreased attractiveness of the industry as a viable business model as it faced a cHaLlEnGiNg MaCrO eNvIrOnMeNt.

Farmers faced much higher costs during 2022. Some of this is because of broader inflation (what’s that?), while the vast majority of it is also the result of the war in Ukraine. The same crunched energy supply is leading to higher energy costs for farm operators which often rely on 24 hour lighting for plants.

Unsurprisingly, this has set the sector back. Many companies have been forced to lay off workers and shutter plans for expansion. Maybe it will be a bit longer until your Sweetgreen order was grown just down the street, after all.

Side note, I’ve never actually seen what the execs at these vertical ag companies look like, but I just have to imagine that they’re as crunchy as they come. I’m talking brew their own IPAs and don’t use deodorant, granola.

The road of the founder is a lonely one, and you might feel like you walk alone. Don’t succumb to this trek along the Boulevard of Broken Dreams. Join a community of fellow Green Day stans and check out The Daily Preneur.

Picture the first time that you walked into the SAE house in college, carefully maneuvering between empty Natty cans and pizza boxes as you made your way to the makeshift bar like Indiana Jones in The Temple of Doom.

That same, trashed environment is playing out above our heads, and we barely even notice. Rather than being the result of Brad, Chad, and Thad, though, it’s the result of hundreds of space companies seeking to capitalize on the goldmine that is low Earth orbit.

You’ve probably heard of satellites and telecommunications. At the very least, if you’re reading this, you’ve at least interacted with them as they’re the foundation powering the internet from a few hundred miles above.

With the ever-growing demand for fast interconnectivity and emerging fields like intelligence in military, agriculture, and climate, more companies than ever are seeking to launch their very own little Wall-Es up into orbit.

Unfortunately, though, even in space, there’s a finite amount of room, and this is making the in-demand area where satellites operate best too crowded, both from new launches and from old ones, many of which are either breaking down over time and becoming worthless or which were broken from the very start.

For years, now, these obsolete objects have been floating around in space like those precious beer cans, further pressuring the already precious supply of near-space room.

Enter ClearSpace, a startup seeking to address this massive problem by providing non-responsive satellite and space debris removal services.

These essential services will serve as the necessary plumbing system of the growing space economy, allowing the rest of the industry to continue to evolve as the demand for existing and emerging space subindustries grows.

The company also highlights the importance of sustainability.

Take a look at the news, and chances are that you’ll see some country experiencing record high/low temperatures and recurring “once in a generation” weather events. Such are the results of humanity’s heavy pollution footprint as we’ve damaged our own planet nearly beyond repaid.

Many question whether we should be allowed to do the same to the solar system beyond us. ClearSpace addresses this concern, removing the more than 5,000 non-functional objects in orbit, a number which is growing by the year.

A few missions have been launched to attempt this, but they’ve been unsustainable models, relying on astronauts on shuttles manually capturing and repairing debris. ClearSpace’s incredibly precise solution completely reinvents this procedure, making it cheap and efficient to significantly impact this market.

Though the company has not launched one of its debris-clearing missions yet (no such mission has ever been launched by anyone), the plans are already in motion for the first, ClearSpace-1, and the company still has significant traction indicating its future as the leader in this field.

Unlike getting the green light to throw an elastic suit on a well-liked actor and calling it a Marvel movie, the process of planning and funding this first mission wasn’t an easy one.

In 2019, the Switzerland-based company was selected from a heavily competitive pool of candidates by the European Space Agency to clean up the debris from the organization’s Vega rocket launch. This selection came with a nice Venmo notification for $104 million.

Following up on this, the team’s Collision Avoidance System was named “Best Product” in 2020 by Forbes, and the company itself was named one of the most innovative space tech companies in 2021 by FastCompany.

This publicity and partnerships like that with the ESA have allowed the company to generate an estimated $20.4 million in annual revenue and outside funding from leaders in the aerospace and telecomms sectors, indicating that these companies have recognized the importance of ClearSpace’s product in their lines of work going forward.

In total, investors have poured $28.6M into the company, the bulk of which came from the company’s Series A led by OTB Ventures and Swisscom Ventures which closed just last month. In a capital-intensive industry like space, this cash injection will prove invaluable to the company’s continued development.

The market is also already there, as the space debris sector was worth around $800M in 2020, a value expected to hit $1.362B by 2028. As evidence, the number of LEO sats is expected to quadruple from 10 to 40 thousand by the end of the decade.

There are also low barriers to LEO for satellite companies now, and as more investors are recognizing the potential of the industry and funding startups and rapidly growing companies like Rocket Lab in the ecosystem, the need for cleaning up their messes will continue to serve an important need.

If this market wasn’t already large enough to support a unicorn, the company also has the ambitious goal to expand its services to preventing this debris in the first place.

After getting the debris removal side of the industry down, the company’s next step is entering the equally-important market for on-orbit satellite servicing. This means that rather than letting satellites become obsolete in the first place, ClearSpace will offer its services in their reparation without ever having to bring them back to Earth, saving millions of dollars in the process.

If even massive satellites can be recycled, you can sort your coffee cups.

The size of the industry has understandably drawn a few well-capitalized companies to the space, though many of them are addressing the problem in their own unique ways.

For example, LeoLabs has raised $82M in total to provide LEO (get it?) mapping and spatial awareness services. In English, this means that it helps companies to avoid the many floating objects in space upon launch and orbit planning. However, they fail to solve the problem of removing this debris, and in fact could really benefit from ClearSpace making their job easier.

Other companies are focused on just on-orbit (feel like it should be called in-orbit but whatever) servicing such as Galactiv. While its name might sound cooler, it still won’t be as widely known as ClearSpace’s will be after its prior success with debris removal. This repetitional edge should translate and give the company a competitive one as well.

Finally, a startup is only as good as its founding team, and ClearSpace has an excellent one.

Founded by CEO Luc Piguet and Chief Tech and Engineering Officer Muriel Richard in 2018, the company has since grown to 88 employees. Since getting his MBA from Stanford, Luc has gained invaluable experience working in the hard sciences, and space tech in particular, in both scientific and business roles. Muriel is a superstar in the aerospace field with time spent with NASA and various academic institutions. If anyone can figure out how to both deliver a great product in this space and then ship it, it’s this team.

ClearSpace will be successful, but I’d like to end by pointing out that the importance of this company and others like it highlight the growing need for international cooperation in aerospace standards.

Simply put, the current understanding of “everyone for his/herself” isn’t sustainable, and more needs to be done to prevent much of this space cluttering from ever occurring and then preventing it from posing a threat to future missions and even to the people of Earth living their lives not too far below.

Maybe if we had some sort of agreement in place, we could even get the aliens to sign on so we can stop spending $400K/rocket to shoot down their greeting balloons 🤷 

TLDR: ClearSpace offers services for non-responsive satellite and debris removal. This service is essential to cleaning up the already cluttered low Earth orbit satellite industry as more companies seek to utilize near space for telecommunications and intelligence. With expert leadership and contracts signed with major organizations like the European Space Agency, it’s safe to say that this company will be a winner for years to come.

Cheers to another day,

Trey