In a paddock on a property just outside of Rathdowney in south-east Queensland, Adam Gilmour, a former Citibank executive turned rocket man, looks anxiously at his watch.
The testing of an engine that is designed to propel 1500 kilograms into orbit has hit a hitch. In the ironically named “VIP tent” on the next hill, the founder and chief executive of Gilmour Space Technologies speaks into his walkie-talkie with his engineers and technicians in the bunker on the other side of the gully, next to the hybrid rocket engine.
The testing has drawn significant attention, and not just from the local cops and fire engines. Representatives from the Department of Defence and the Civil Aviation Safety Authority are watching, partly from a safety perspective, and partly to keep an eye on the technology which could herald the beginning of a small satellite industry in Australia.
But after a bit more back and forth between Gilmour and his team, the bad news arrives. The regulator valve controlling the hydrogen peroxide that fuels the hybrid rocket has a leak. The engine testing is off for today.
“Mission aborted,” says Gilmour with a grimace. Welcome to the frontier of Australia’s space industry.
The space race
As earthlings approach the 50th anniversary of Neil Armstrong setting foot on the moon in 1969, the space race has shifted from government agencies to tycoons.
Jeff Bezos, the world’s richest person thanks to his online retail giant Amazon, pumps more than $US1 billion ($1.35 billion) a year into space company Blue Origin. So far this year it has launched eight rockets and Bezos plans to start selling tickets next year for suborbital flights – that is, journeys into space that return without doing a full orbit of the earth. He believes that one day heavy industry can be located on distant planets and the earth can revert to being a more natural paradise.
Elon Musk’s finances are on less sure ground as analysts scrutinise the heavy cash burn at his electric car and storage battery company, Tesla. But his privately owned SpaceX is already pushing beyond gravity, flying cargo to the International Space Station. Musk is a candidate to start taking tourists to the ISS from 2020 for Axiom Space, a company set up by a former NASA manager of the ISS, which plans to assemble its own space station. Sir Richard Branson’s Virgin Galactic company also aims to offer space flights to tourists.
While the space battle of the billionaires has caught the most attention, Australian companies are quietly working away on getting their own slice of the global space economy, worth $US384 billion in 2017 according to Colorado-based global body the Space Foundation.
That setback for Gilmour Space, which occurred during a testing in May, is par for the course as it pushes towards its target of a commercial launch by 2020. And the hurdle is soon overcome. One week later, and with a new regulator – designed to bring the hydrogen peroxide down to a lower pressure before it enters the rocket chamber – the same team successfully test the rocket engine, achieving a stable thrust of 75 kilonewtons (or 16,900 pounds of force). It’s a new record for the company and more than enough for their suborbital rocket launches set down for October.
Smaller satellites cheaper
“The trend in the satellite market is building smaller satellites,” Gilmour says. There are only about six legitimate companies developing smaller launching vehicles – that is, rockets – that are more efficient for small satellites, and even that is not enough to meet the demand, he says. “We are one of the six.”
Two of those making smaller satellites are from Adelaide – Myriota and Fleet Space Technologies, the latter which operates from a warehouse in the industrial suburb of Beverley. These “nano-satellites” weigh about 10 kilograms and are the size of a shoebox. Instead of using Gilmour Space, Fleet is using Spaceflight, a Seattle-based contractor, to help put its nano-satellites into space. Two are scheduled to go into orbit in October – one aboard a launch vehicle operated by the Indian national space agency and the other on a SpaceX Falcon 9 from Vandenberg Air Force Base in California.
Launching a satellite used to cost more than $1 billion. “Nowadays you can launch a nano-satellite for less than $500,000,” says Fleet’s energetic chief executive, an Italian-born rocket scientist named Flavia Tata Nardini. “It’s opening up the market access to private enterprises.”
With a flourish inspired by the pioneering ways of space probes past, Fleet’s nano-satellites, known as Centauri I and II, will have a small plaque attached and inscribed with the words “I love to sail forbidden seas”, a quote from Herman Melville’s classic adventure novel Moby Dick.
Internet of Things
Fleet is going all out to be a pioneer itself in the step change of connectivity known as the Internet of Things. When still more nano-satellites are launched, it will have the infrastructure in place to provide internet connectivity for billions of IoT devices, with sensors feeding data back via a smartphone app.
The cost savings to users in the agriculture, mining, logistics and maritime industries come from the software that Fleet is using; instead of sending vast reams of raw data, the software filters and compresses the data, making it cheaper to beam into space and back again.
One possible use close to its Adelaide home base is placing sensors on vineyard posts, enabling wine companies to closely monitor water levels, temperature and other variables to enable better decision-making and lift investment returns.
“Space entrepreneurship is a mega-trend,” Tata Nardini says. “Elon and Jeff, all the biggest ones, are working in space. They were successful in the software revolution, and what is next? It is space.”
Stars in her eyes
Tata Nardini dreamed big as a young girl growing up in Rome, sending letters to Father Christmas in the hope of being given a telescope. She brims with confidence and is fiercely competitive – at one time she played professional basketball in Italy before working at the European Space Agency in the Netherlands. She was working in The Hague when she fell in love with Stefano Landi, an engineer originally from Adelaide. They moved to Adelaide in 2012 when she was pregnant with her first child. They now have two daughters, both of whom have inquiring minds, and her husband works in the defence industry.
She co-founded Fleet in 2015 and the company has offices in Adelaide, Los Angeles and Delft in the Netherlands. It employs 20 people and reached a major milestone in late July when a ground station to track satellites became operational at Pinkerton Plains, 70 kilometres north of Adelaide. Tata Nardini still marvels at scientific discovery, but being able to apply the technology in a commercially savvy way – compressing data to make it cheaper to send – is just as exhilarating. “The business side is as exciting as the science. Low-cost connectivity is a massive enabler. You need to unlock this market to unlock everything else.”
Fleet is an Australian “moonshot” – Silicon Valley speak for businesses with goals so audacious that they require significant breakthroughs in technology. And like other moonshots such as Google’s Wing, which is building an autonomous delivery drone service, Fleet will either be a spectacular failure or a booming success, Tata Nardini says. “We are either seriously wrong or we are massively right.”
Mike Cannon-Brookes a backer
Making a bet that it’s the latter is Mike Cannon-Brookes, co-founder of Atlassian and worth an estimated $5.16 billion in the Financial Review Rich List. He’s invested in Fleet via venture capital firm Blackbird Ventures. Cannon-Brookes also had some big space dreams as a youngster. “Ever since I was young, space has fascinated me. I’ve always been intrigued by the stars, the galaxies, space explorations and, even at a rudimentary level, the physics of it,” Cannon-Brookes says. He loves wrestling with the theories of black holes and the mind-expanding vastness of it all.
The tech entrepreneur also loves the grand ambitions of Fleet and he’s not afraid if it burns up in the corporate equivalent of a blazing fireball. “Fleet’s a fascinating company, doing exciting things to democratise space. They have an incredibly talented team with galactic-scale ambition.”
As well as backing Fleet, he’s a big believer in the fledgling Australian Space Agency that’s just been established by the federal government with $41 million in seed funding. It gives Australia a seat at the table in the international arena when regulations for space are thrashed out, Cannon-Brookes says. And that’s becoming more important as space technology becomes more and more critical to business, including through greater internet connectivity.
“Space is a global industry regulated at an international level. If we want a space industry here in Australia, which I believe we do, we need an agency to represent and promote our interests,” says Cannon-Brookes. “We can either sit and watch other countries take the lead, or we can be part of the innovators who build the industry.”
He’s pumped up about what can be done from a country in the southern hemisphere, in a sector dominated by northern hemisphere scientists, regulators and entrepreneurs, and wants to see some more of that Musk- and Bezos-style private sector oomph and urgency in Australia’s public sector push. “Their hunger, drive and vision is exactly what we want and need here in Australia.”
Michaelia Cash a space fan
When Michaelia Cash was a girl growing up in Perth, one of her favourite television shows was Lost in Space. She was a big fan of the sleek lines of the Robinson family’s Jupiter 2 spacecraft, and that led to a soft spot for Jupiter in the planetary system for the junior Cash. Time in outback Western Australia under a night sky also prompted plenty of rumination about just what was out there. “It was that absolute fascination for what lay beyond,” Cash says.
As the former Minister for Jobs and Innovation – and now Minister for Small & Family Business, Skills & Vocational Education – she’s taken more hits than many, including over an investigation by the Australian Federal Police into whether her staff tipped off media about a police raid of the Australian Workers’ Union headquarters. The Commonwealth Director of Public Prosecutions is reportedly involved and a court hearing was scheduled just after AFR Magazine went to press. The Federal Opposition has accused the Minister of avoiding the media, but that’s certainly not the case when it comes to the space component of her portfolio. Her enthusiasm for the topic is palpable.
Australia might be slow out of the blocks, but it won’t be left behind, Cash says. “We can learn from those who have gone before us.” She argues that now is the time to be weaving all the disparate strands of research, academia, government and private enterprise into a more co-ordinated approach under the one umbrella. A nimble national agency with a fresh approach in a dynamic industry can catch up fast, given Australia’s pioneering efforts in specialist areas such as automation in mining, where Rio Tinto is a global leader, and “precision” agriculture where satellite technology is harnessed.
“What we’ve lacked to date is a co-ordinated body,” says Cash. “We need a single doorway to international participation.” Yes, the $41 million in seed funding money is modest, but a sharp drop in costs of technology has transformed what is possible for the private sector. “It’s now a flourishing sector with far lower barriers to entry.” The aim is to triple the size of Australia’s space industry to $12 billion by 2030. Other players include Saber Astronautics, which develops mission control systems and Silentium Defence, which among other things tracks space junk.
Which state will get the prize?
One of the first big decisions to be made is deciding which state the Australian Space Agency will call home. In mid-June, South Australian Premier Steven Marshall wheeled out astronaut Andy Thomas, who grew up in Adelaide and has made four trips to space as an astronaut with NASA, to push SA’s case. “South Australia’s got the heritage, the technical resources, the educational background, the technical infrastructure, the industrial base, all the things that you need to have a burgeoning space industry,” US-based Thomas said on a recent visit home.
Leading the charge for NSW is Dr Paul Scully-Power, the first Australian to journey into space, while the Victorian government points to a big aerospace industry presence already, with large corporates including Lockheed Martin, BAE Systems and Boeing, in trumpeting its credentials. The WA government is using a report by WA Chief Scientist Peter Klinken to help push its case.
Watching closely is NASA, which relies on the Canberra Deep Space Communication Complex to track its spacecraft, and the European Space Agency, which has one of its four deep-space tracking stations 140 kilometres north of Perth.
Meanwhile, some major corporates see the clear link between the space technology companies, telecommunications and the future impact on their businesses. Rio Tinto and Telstra were among a string of blue-chip firms to make submissions to a review last year of Australia’s space industry capability.
Megan Clark inspired by Sputnik
Former CSIRO boss Dr Megan Clark, the interim head of the Space Agency, has to make a recommendation for the agency’s permanent home to the federal government by the end of calendar 2018. “It’s certainly excited the nation. You can see the momentum building,” Dr Clark says. She agrees with Cash that while Australia is coming from behind, having a “blank sheet of paper does have some advantages”.
Dr Clark remembers being a little girl growing up in Perth and her father taking her out to look at the night sky after Russia had launched Sputnik, a low-orbit satellite, in the late 1950s. “It really was an exciting thing,” Clark says. She loves the thrill that deep space delivers. At a time of extraordinary geopolitical shifts on the world stage, she says, Australia can be an important, albeit small, player and “trusted broker” as more consistent space regulations are formulated globally, with business and space growing closer.
She points out a little-known fact that gives this country an advantage: in Australia, the stars we see in our northern sky are also visible from the northern hemisphere, but the stars in the far south are visible only from the southern hemisphere. The centre of our Milky Way galaxy passes overhead in the southern hemisphere, and so is best studied Down Under.
“We look into the solar system, which is why we are a great location for deep space research,” says Clark. “We are a vital part of the global node.” A southern hemisphere location is also a positive for some fresh thinking on ways of tackling space debris. With estimates of 30,000 softball-sized or larger pieces of space debris in orbit, plus half-a-million-odd marble-sized pieces, there’s a growing need for a galactic-level war on waste.
The cost of going into space
For businesses looking to expand beyond Earth, the weight of gravity might be, metaphorically speaking, getting lighter. But it still costs a lot to be a player. Bureau of Transportation data from the United States, which has tracked commercial space launches for almost two decades, shows that between 2000 and 2017 there were 202 launches from the United States, 169 from Europe and 162 from Russia. Data on failure rates is a little more opaque across the space industry, but was running at about 7 per cent last year.
Tata Nardini believes there won’t be as much capital going up in smoke as in the dotcom boom and bust of 1999 and 2000. It’s a complicated industry, she says: “Not everyone can build a rocket in their garage, so there’s a natural selection.” As space technologies move from the realm of defence to greater commercial use, everyone’s looking for a financial return, says Tata Nardini.
That includes Niki Scevak, a co-founder of Blackbird Ventures. In the past six years the venture capital firm has invested in 42 companies, including Canva, the Sydney-based online design software firm, and Zoox, the driverless taxi company valued at almost $US3 billion which was until recently headed by Melbourne designer Tim Kentley-Klay.
Part of Blackbird’s second fund of $193 million has been invested into Fleet. Hitting paydirt on its network of nano-satellites might be a long shot, but Scevak likes the company’s vision. “What Australian venture capital companies haven’t been doing is taking enough risks,” says Scevak. “In general, we expect half our companies to fail. But you want to be fully ambitious.”
Time to do business
Blackbird was also attracted to Fleet because it was trying to substantially lower costs for a new technology, instead of making a new technological breakthrough. “I think the problem they are trying to solve is not one of technology, it’s one of costs,” Scevak says. And the costs equation is rapidly changing. In the space industry, the government was traditionally the number-one buyer of products and services through complex tender processes. Scevak likens that to the equivalent of a Formula One racing car being built where “a school bus would suffice”. Fleet is that school bus, and Scevak is firmly on board.
The launch of Fleet’s two nano-satellites, scheduled for October, will be cheered by Fleet and its investors, although Tata Nardini says there’s no time to waste. “Start-ups shouldn’t celebrate too hard. There’s too much to do.” October should also see the first stage test flight of one of Gilmour’s space’s full-scale engines, aiming to reach an altitude of 40 kilometres.
And if their enthusiasm isn’t enough to convince you of the merits of Australian businesses going into space, consider this: in January, Rocket Lab, a US company founded by Peter Beck, a New Zealand engineer, successfully launched three small satellites from a pad on New Zealand’s North Island.
The rocket launch – called “Still Testing” – meant New Zealand had officially become the 11th country in the world to launch a satellite. Rocket Lab’s first launch with a commercial payload was scheduled for June, but has been delayed to November or December. The name of this next launch – “It’s Business Time”.
Good things in small packages…
Breaking into the space industry is not cheap.
Traditionally, commercial rockets that take small satellites into space can charge up to $50,000 a kilogram for their payloads. The cost of the payload for the smaller rockets being developed by Gilmour Space Technologies works out to about $33,000 a kilogram, providing a cheaper alternative for businesses and governments that want to get their small satellites into space.
Adam Gilmour, a former Citibank executive who has been based in Singapore for the past 20 years, has had to raise $32 million in a two-and-a-half-year window for his team to take their technology to commercial launch. If the rocket can successfully make it through the testing phase, the company has “letters of interest” worth $US100 million to try the new service, Gilmour says.
The smaller rockets (with a height of up to 28 metres) are worth about $10 million each, fly at a lower orbit, use less fuel and are more specific in where they place small satellites compared with larger rockets. The company has almost 30 staff, a rag-tag bunch of young engineers straight out of university looking for adventure, or veterans of the motorsport industry. In July 2016 it launched Australia’s first privately developed hybrid rocket to an altitude of five kilometres.
The next test for Gilmour Space Technologies will be the flight test of a full-scale engine in October, which they plan to use in the first stage of their Eris orbital rocket. Eris is the company’s three-stage hybrid rocket, which will be dedicated to launching small satellites of up to 400 kilograms to low earth orbit by 2020. The satellites will help enable broadband speeds of 1000 megabytes per second – the fastest download rate for the National Broadband Network – from anywhere in Australia or the world.
Gilmour grew up in Brisbane before living in Sydney, Perth and Melbourne, where he went to Monash University. In 2015 he quit his job at Citibank to focus on Gilmour Space Technologies, which he founded in 2012. Its head office is on the Gold Coast and there’s a second office in Singapore.
Small rocket market
Although the United States and Europe dominate the large-scale rocket market, there are only about five or six companies around the world, including Gilmour Space Technologies, targeting the small rocket market. In the same manner that increasing amounts of technology can be crammed into smaller mobile phones, satellites are shrinking in size too. “You can now have a satellite the size of a small fridge with the same capability as a satellite the size of a car 10 years ago,” he says.
For the half dozen larger satellite companies, business has also fallen off a cliff, says Gilmour. The number of large satellite launches has more than halved to about seven or eight a year. Given each of those larger satellites cost about $200 million, that’s a big hit to the bottom line. Hence established satellite companies are eyeing off a move into smaller satellites, which can cost about $500,000. They do have a smaller shelf life than larger ones – about five or six years – but with technology moving so quickly, that suits most companies looking to put a satellite in space.
For Gilmour, a key problem is the comparative lack of government funding in Australia, compared with other countries that have traditionally bank-rolled their respective space industries. “Australia has never done anything in terms of space hardware before, either rockets or satellites. There hasn’t really been the cash in the country to do that,” he says.
Gilmour backs the federal government’s move to create a new Australian Space Agency, but he was more enthusiastic about the $260 million set aside to develop satellite infrastructure and technologies, and improve access to satellite imagery.
“Other countries are investing hundreds of millions, even billions, in their space industries,” Gilmour says.
“Australia can’t seriously believe it’s going to change the needle without a good chunk of money to get the industry started. We spend billions of dollars on satellites and launches purchased overseas. If the government redirected those purchases to Australian companies, it would be enough to get the industry moving fast.”