ISIS – Innovative Solutions In Space
Nano-profitability
A Review of the Financial Success of Nanosatellite Industrial Companies
Jeroen Rotteveel
SmallSat 2014, Logan, Utah
ISIS group - overview
Founded in 2006, spin-off from Delfi-C3 project
Currently about 50 staff (FTE)
Provider of small satellite products and services
Vertically integrated small satellite company
Offices in Delft, The Netherlands and Somerset West,
South Africa
• ISIS directly involved in 11% of all satellites launched in
2013 through its launch services and dispenser systems.
• ISIS Builds 10 spacecraft for various customers
• ISIS provides 100’s of nanosatellite components
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Profit in the space sector?
Upstream vs Downstream
Faster Better Cheaper – CubeSat Revolution
Booming Business
Dedicated Nanosat companies on the rise
Beware of groupthink
Plug-n-Play Building Blocks – Not really
Off-the-shelf delivery – Not always
Mass Production – Not really
Challenges – Heritage vs Innovation
Challenges – Acquisition Times
Challenges – Customer Mix
Challenges - part obsolensence
Challenges – rising inventory cost
Making money with NanoSat Products?
ACME NanoSat Company’s nanoWidget TM
18 month development
2 FTE, ~ 215,000 USD development cost
Sell 100 units in 5 years, achieve 20-25% market
share in 2 years with ~30 units a year
• Competitively priced at 7500 USD, Recurring cost
about 50%, direct sales cost ~ 25,000 USD / year
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• Results 225,000 USD annual revenue with ~87500
USD gross profit, or 39%.
• Quite a good result right?
• What about: NRE write-off and cost of capital?
NPV Calcultation – Nominal Case
NPV Calcultation – R&D grant
NPV Calcultation – investors
NPV Calcultation – sales increase
NPV Calcultation – increased grants
Outlays precede returns
€100,000.00
Annual Profit European Nanosatellite Companies
€50,000.00
€€(50,000.00)
€(100,000.00)
€(150,000.00)
€(200,000.00)
2008
2009
Average
2010
2011
2012
2013
Enablers for new business cases
• More missions driven by real use case
– Market pull
– Larger constellations
– Enlarging the market
• Additional government support
– Lowering R&D cost for companies
– Launching customers
• Maturing of the upstream value chain
– Less competition
– Efficient partnerships
– Complementarity
Future for nanosat companies?
• Further Specilization
– Lower overheads
– Larger volumes of limited product
portfolio
– Finding their place in the value chain
• Consolidation of integrators
– Establishment of nanosatellite ‘primes’
– Economies of scale, nanosat factory
– Preffered partner for downstream
nanosat entrepeneurs
Conclusions
• Upstream nanosatellite companies have
paved the way for the current boom in
nanosatellite applications,
• Despite the current boom in missions it
remains challenging to maintain longterm
profitability just like any other space industry
segment,
• Nevertheless, the increasing volume and
market dynamics in the nanosatellite market
allow for faster return on investment,
• Many companies have found their way to
become and maintain profitability and to
support the sector successfully,
• The nanosatellite companies are here to stay!
ISIS Contact information:
Molengraaffsingel 12-14,
2629 JD Delft,
The Netherlands
Tel:
+31 15 256 9018
Email:
info@isispace.nl
Web:
www.isispace.nl
Visit our booth at the SmallSat Exhibit (booth # 20)
Thank you for your attention!
Jeroen Rotteveel - J.Rotteveel@isispace.nl - 003 1 15 256 9018