(Image courtesy of NASA Marshall Space Flight Center).

Lockheed Martin Invests in Terran Orbital's Nanosatellites

Lockheed Martin is known for building satellites the size of Easter Island statues. But now the company is putting some money toward satellites that can fit inside a breakbox.

Lockheed Martin's venture capital unit said late last month that it had invested in Terran Orbital, a maker of small satellites that provide internet connectivity or survey farmland. These contrast with the hulking satellites of Lockheed Martin's design, which connect soldiers on remote battlefields and position smartphones on a world map.

Neither company disclosed the value of the investment.

"The opportunity to invest in a nanosat leader allows us to address our customer's increasing interest in rapid, responsive, and cost-effective technology missions," said Chris Moran, executive director of Lockheed Martin Ventures, which launched last year with $100 million to invest in start-ups that fit strategically with its parent company.

The investment is the latest acknowledgement of an industry shift toward small standardized satellites called CubeSats. Not only have power amplifiers and other parts become smaller and cheaper in recent years but launch costs have also fallen. For now, the small satellites share space with larger satellites on rockets.

Many start-ups are taking advantage. Planet's constellation of 149 satellites take high-resolution snapshots of earth's surface to be used by investors to monitor empty store parking lot spaces or by farmers to track crop health. OneWeb has proposed a constellation of 648 satellites to expand internet communications to developing countries and rural areas without broadband access. It plans to add an additional 1,972 after the first wave.

Where Iridium and Globalstat stumbled into bankruptcy after similar schemes two decades ago, satellite start-ups appear on firmer ground. But attempts to bridge the generational gap have not always gone well: OneWeb, which has raised $1.7 billion from investors including Softbank, failed to broker a merger deal with Intelsat. The deal would have created a fiercer competitor to ViaSat and Telesat, but Intelsat's creditors balked.

Last year, an annual report from the aerospace research firm Teal Group identified 5,095 satellites that would be launched from 2016 to 2035, up from 3,280 payloads scheduled for launch from 2014 until 2033. More than eighty percent of the payloads are destined for low earth orbit, where most small commercial satellites will reside.

The Federal Communications Commission recently granted OneWeb access to the U.S. market, but regulators still harbor worries. In a statement on the OneWeb decision, FCC commissioner Michael O'Reilly voiced concerns about in-line interference and the space debris that will accumulate as the tiny satellites are taken out of commission.

For now, little has curbed growth at satellite companies like Terran Orbital. Anthony Previte, chief executive of the Irvine, Calif.-based firm, told trade publication Satellite Today that it had been accepting more orders that it could fill. The company plans to spend some of Lockheed Martin's cash on a bigger manufacturing space, he said.

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