EnduroSat welcomes a new investor

Nanosats_years_2020-04-20_transparent

According to nanosats.eu, today there are 687 operational nano satellites in Low Earth Orbit. Among them is EnduroSat One, as well as many others made by EnduroSat and successfully operated by other companies. 1,387 nano satellites have been launched to date.

FROM CUBESAT VENDOR TO A SOFTWARE-DEFINED SATELLITES PROVIDER AND A SPACE DATA SERVICE PLAYER

Neo Ventures backed EnduroSat in 2016 to support its transformation from a manufacturing to a service company. Today we are pleased to welcome a new partner in this journey. Using the investment and network of Freigeist Capital, EnduroSat is prepared to launch its pilot shared satellite mission with customer payloads by 2021 and move on to commission its full space data service by 2022.

Freigeist is the privately owned investment firm of Frank Thelen, Marc Sieberger and Alex Koch. Much like Neo Ventures, Freigest is a privately-held, open-ended investment company. The firm has 14 seed stage investments focused in energy, commercial transportation and information technology. It was established in 2017 and is based in Bonn, Germany.

Space startups raised $3.5 billion in 2019. While companies like Blue Origin, SpaceX and Virgin Galaxy account for most of the capital invested in the industry, there is a growing number of new entrants. EnduroSat is one of them, differentiating through its modular platform and software-defined satellites. The new investment will be used to transform the company from from a space equipment vendor to a space operator and data provider through CubeSat constellations.  

Satellite costs have dropped to a fraction of the original price and so has the risk coefficient. CubeSats have evolved to mega constellations of small satellites supporting Earth observations and/ or communications, promoting more and more investment, further driving down the cost of deriving value from space.

 

 

Autonomy = immunity

Why our world will never be the same.

  1. The biggest single change in the past two decades was Internet.  4.5 out of 7 billion people on the planet learn, work and socialize, thanks to the internet. When I graduated from college, that number was only 4% of global population. 7 years later, when I became an entrepreneur, the number increased to 16%. By the time I started Neo Ventures, a fund investing entrepreneurial capital in entrepreneurs with truly exceptional ideas and personal drive, this same percentage has more than doubled and reached almost half of the population. Today, the number is 64% and I still have a lot more time to see and experience from life.
  1. The Internet delivered a very basic human value, which most people did not have: autonomy.  The current environment will take the desire for more autonomy to a new level. That is the reason why the world will not be the same anymore as the way we used to know it until 2020.
  1. Every person who has access to the Internet, has access to both valid and invalid information about what C-19 is and what its effects are on different industries and people. Most people perhaps are already feeling C-19 as the second biggest change, after Internet. I expect a “new normal” in life, from how counterparts establish trust, transact and manage risks to how enterprises and communities behave. Social models and technologies, supporting human autonomy, distancing and remote management of assets and of people, will take over current models.
  1. Born around 1485, Hernán Cortés was a Spanish conquistador and explorer who claimed Mexico for Spain. While weaponry and tactics played a role, most of the the  power he exerted in the New World was directly caused by European diseases. The smallpox epidemic Mr. Cortés brought on his ship spread inward and decimated Mexico, reducing its population by 40 percent and killing 15 million people. Other European diseases, such as measles and mumps, reduced the New World population by 90 percent or more. Europe was not spared: the Black Death bubonic plague killed 25 million people in western Europe in the 14th century, about half the regional population. Damage from C-19 is just under 250,000 people, but information from the Internet makes C-19 feel, as if each of us is a target of a new biological weapon, with no remedy to date. The remedy I see is the example of people and societies who already practice autonomy. They will lead by example, showing the others how to be immune. Immunity will not come from a vaccine or a magic pill. It will come from practicing responsibility.
  1. Around 2015, I began to believe that people who dare to make deep changes in the way we access and use the Internet will take the concept of autonomy to a completely new level. Subsequently, I decided to invest in those who share this vision. 
  1. Following this concept, I started supporting two teams with two different ideas , yet both brought remarkable success. One of them had the goal of making space easy to use for human communications needs through small satellites, while the other was aiming to change the way legal medicine is capable to test legal cannabis, to help cure disease and psychological traumas.

Looking back at how everything started from single ideas of two entrepreneurs  throughout the years, I am glad to see that their teams, EnduroSat from Bulgaria, and GemmaCert from Israel, are continuing their development and expansion. The technologies behind those startups will contribute even more to achieving autonomy and positive change in the world. People who share, listen, invest, and have courage can serve as an inspiration to all other people who carry new ideas and might need some encouragement to do the first step. C-19 brought many unexpected events and loses to the whole world and it affected each person and business in one way or another. However, one of the positive insights is the fact that more people started paying attention to ideas and are willing to understand the direction in which we are all headed.

The world will not be the same as before, so adaptability and innovation will be among the most crucial factors that will help us keep our lifestyle and achieve even a better one. Yet, we are also the ones who can change the world with our ideas and co-create the new norm.

made in China

Home-quarantined Italians and Spaniards those days sing from the balconies. In Spain, we hear the anthem every night. In Italy, one hears also Volare or Il Canto della Verbena. People are doing this to maintain and strengthen linkeage and interconnections: only defense people have against their own fragility today. They feel, that to a large extent their state and its EU counterparts have failed their trust.

Few today point a finger at the asymmetric information how a new biological weapon was dumped in the heart of industrial Italy. Why this matters to investors? Because buy and sell times are around the corner. Russia did not wait a minute to dispatch support where China long ago bought up assets. Europeans do not trust Europe will work to bail us out this time. Weierstrass, a 19th century mathematician, has an approximation theory which says problems based on wrong assumption have no right answer.  EU is at risk that it will be bought, piecemeal, by players who have cash and are willing to shed it.

Ms. Merkel made the point last week to the Spanish and Italian prime ministers. The lack of consensus over the creation of new tools like the coronabonds left the European Stability Mechanism as one of the few options available to Italy, and possibly to Spain, down the line. ESM won’t kick start SMEs in either country. It is a mix of steps that will. Most entrepreneurs we know are dismissive of accepting state injections in exchange for equity and some states are trying to go down this route.

By 2014, several hundred Italian businesses were already owned by Chinese investors, not including the ones owned by Chinese living in Italy by then. China’s central bank held stakes in several Italian blue chips like Fiat, Telecom Italia, Generali, and Eni.

While the public 5 years ago was seeing  “do not buy “Made in China” items” signs, cheap imports from China were inferior knock-offs, from clothes to pasta. This changed over time and even an online portal—vendereaicinesi.it, which means “sell to the Chinese”. Human tragedy is not to mix with business examples but one must think long term before inviting the quickest investors who have cash. Reaching to existing partners is the best way out.

 

 

 

We are corona-proof economy

Screen Shot 2020-03-14 at 08.32.12

Our very own Stephen Auth, a chief investment officer of a mega-fund and a friend with 40 years of practice on Wall Street, reached out yesterday. His advice was simple: don’t mess with it but don’t forget it is an animal-bred virus and it will go away. Well, it may have mutated into a human bug but factual evidence shows it is being contained.

More importantly,  Neo Ventures believes that we will avoid recession. Small enterprises are better prepared and the big ones are more prepared than in 2009. The economic fundamentals prior to the virus and the policy of the Fed are both solid feet. One more time, America-lead rebound will end the story. This time, America also has a silent partner: China.

The efforts of the Chinese government and people have been nothing short of astonishing and so has been the result. This is a superpower, re-asserting its role and influence, as it helps the rest of the world come out from a freeze. Our bet: by mid-2021.

In best shape, we believe companies enabling human safety and remote work stand to make a killing. We like Raytheon and Zoom. The Zoom example is below. We call them off-handers. Neo has access to off-handers proprietary deal flow including dealing with forest fires, human depression and digital artworks. All of these are both off-handers and resilient again tough cycles – and they are also a great response to the current situation as they provide real time solutions to needs we face.

Screen Shot 2020-03-14 at 08.51.09

I am tempted to quote a certain German author from 1929: All Is Quiet on The Western Front. For those of you at home, the movie was ranked seventh-best American epic film. While not everything is yet so quiet, we can look ahead because the skies are clear.

 

 

Mini-corns are rising in the East

89813110_527444014827351_6901405372519546880_n

The CEE region continues produce champions in the European tech startup scene.

So far, more than 10 unicorns have sprung out of the CEE region, with a combined value of €30 billion. Most came out Romania and Poland, with a promising batch of stars rising across the whole CEE region. Serbia, Bulgaria and Greece come next.

With a strong workforce, not influenced by migration and a positive attitude among professionals, Eastern Europe established itself as a powerful tech ecosystem in the last years. Eastern Europe is rising in the tech ecosystem and is no wonder UK startups are flocking to these countries. According to Wired, before early-stage startups would fight to be part of London’s buzz, they are now turning to Bulgaria, Estonia, Lithuania, Poland and Romania as cheaper, less risky locations to make their mark.

In the top 20 fastest-growing tech hubs in Europe by year-on-year growth of attendees to tech-related Meetup you will find a surprising number of cities from the East. Katowice (Poland) has a 101% year-on-year growth and ranks 4 in the overall top. It is closely followed by Sofia (Bulgaria) with a 77% growth and Lviv with a 57% rise.

Bulgaria is catching up with central Europe, where economies based on low-cost manufacturing and exports are shifting to innovative and creative industries. A generation of westernised engineers and programmers with a global outlook now underpins the country’s emergence as the technology capital of the Balkans.

Computer science and engineering graduates are no longer migrating in droves to the US and Germany. Local companies employ about 40,000 software engineers while the IT sector contributes more than 3 per cent of the country’s output, compared with less than 1 per cent four years ago.

Neo Ventures has made an investment in Bulgaria, following the experience of 20+ investments made there by Neo’s founders. It has never been easier to launch a satellite into space. But EnduroSat wants to make it even easier by making CubeSats more affordable thanks to a unique platform.

“Funding is still going to be a challenge for later-stage companies but international venture capital funds are showing more interest,” says Pavel Ezekiev, a partner at Neveq, quoted by the Financial Times,