SAN FRANCISCO — In 2015, Scotland’s Clyde Space Ltd. plans to work with an unnamed U.S. company to establish a joint venture in the United States, a move that would extend the reach of the rapidly growing manufacturer of small satellites and spacecraft systems.
“We are having discussions with another organization about moving into the United States so we can be closer to our U.S. customers,” said Craig Clark, Clyde Space founder and chief executive.
Under the proposed plan, one or more U.S. entities would own a majority of the new firm, which would be staffed by U.S. citizens. That setup would enable the firm to compete for any U.S. government or commercial contracts that are restricted to U.S. companies.
Clyde Space already works with some U.S. government agencies. The firm supplies solar panels and reaction wheels for the U.S. Air Force Academy’s FalconSat-6, a satellite scheduled to launch in 2016 that is designed to demonstrate advanced propulsion technologies and spacecraft subsystems.
“I’ve always had a good relationship with the Air Force Academy, the Air Force and other U.S. government organizations,” Clark said. “The U.K. and U.S. have a very good relationship with a lot of trade moving in both directions.”
Nevertheless, it makes sense for Clyde Space to establish an affiliate in the United States, according to John Wardlaw, investment director for Coralinn Private Equity of Livingston, Scotland, which owns slightly more than 28 percent of Clyde Space.
“A big part of the global space market is based in and around the United States,” Wardlaw said. “Clyde Space does a lot of business in the United States and with U.S. companies. We are getting to the time when we need to have a more formal presence in the United States.”
The U.S. market for small satellites and subsystems is expanding rapidly. San Francisco-based Planet Labs Inc. has launched 71 cubesats. Spire, also of San Francisco, plans to launch at least 50 cubesats. Google Inc. entered the fray with its June announcement that it purchased Skybox Imaging, a firm based in Mountain View, California, that is launching 120-kilogram satellites to provide high-resolution Earth imagery, and on Nov. 10 Elon Musk, founder of Space Exploration Technologies Corp., tweeted, “SpaceX is still in the early stages of developing advanced micro-satellites operating in large formations.”
The growing popularity of spacecraft constellations is helping Clyde Space because customers are placing large orders and repeat orders, which enables the company to reduce costs.
“We are moving to bulk manufacturing now, producing power systems and batteries in quantities of 100,” Clark said. “I expect that will move to 200, 300 or even 500, which will help us drive our price down but keep the quality at the same level.”
Clyde Space’s business has expanded steadily. In the last five years, demand for the firm’s products has surged an average of 40 percent per year. On Oct. 27, Clyde Space reported record profits of 2 million British pounds ($3.1 million), compared with 1.1 million pounds the previous year. At the same time, the firm announced a contract valued at 1.2 million pounds with LuxSpace of Luxembourg to supply power systems for two European Space Agency satellites and a 940,000-pound contract to build power systems for Spire.
Increasingly, Clyde Space is building entire cubesats in addition to components. UKube-1, launched in July, was the firm’s first complete cubesat and the first satellite designed and built in Scotland. Clyde Space is building another cubesat for the Belgian Institute for Space Aeronomy. “We are effectively acting as prime for that contract, not only designing, integrating and testing, we are doing all the operations as well,” Clark said.
Moving from building cubesat components to complete platforms was a natural progression. “We sell all of our component parts for spacecraft for a price that is affordable for universities as well as other organizations,” Clark said. “Because we assembled the one spacecraft and are already working on the next spacecraft, it means that we know how to integrate our products into a complete system. That allows us to add more value.”
Within five years, Clyde Space plans to produce 1,000 complete cubesats per year. “We want to be the No. 1 company in the world for cubesats,” Clark said. “We will have a production line for cubesats. I think that’s where the market is going.”
Clark expects the cubesat market to expand rapidly as military, commercial and scientific organizations identify a variety of missions that could be accomplished with 100 orbiting cubesats equipped with sensors. “If there are 10 missions each with 100 cubesats, that’s 1,000 right there,” Clark said. “I imagine there will be a lot more than 10 missions. We are at such an early stage in our market.”
Clyde Space is preparing for that market growth by bolstering its staff with continual hiring. The firm also is moving to a larger facility. On Nov. 28, Clyde Space plans to move within Glasgow to a 1,000-square-meter facility, three times the size of its current office. “We’ve run out of desk space,” Clark said. “That is a problem for recruitment because we need more staff and we’ve nowhere to put them.”
