Peter Platzer, CEO of Spire, rings the opening bell of the New York Stock Exchange (NYSE) during its listing in Manhattan, New York City, United States, on August 17, 2021.
Andrew Kelly | Reuters
Small satellite builder and data specialist Spire Global began trading on the New York Stock Exchange Tuesday and is the newest space company to complete a SPAC merger and go public.
“We are incredibly fortunate to be at the forefront of a long-term generation change,” Peter Platzer, founder and CEO of Spire, told CNBC. “The only equivalent I can think of in my lifetime is the late 90s, early 2000s, when we replaced the mainframe with the personal computer and this fast iteration began.”
His company merged with the special purpose vehicle NavSight, which valued Spire with equity of $ 1.6 billion.
Spire stock lost 5.2% in trading, closing at $ 9.41 per share. The company is the fourth pure space company to go public via a SPAC this year – after AST SpaceMobile, Astra and Momentus – and more are expected before the end of 2021.
A Spire Global engineer works on a satellite in a test chamber.
The company’s Lemur satellites are small and comparatively inexpensive, each housing a variety of instruments. Spire’s satellites help predict the weather, track ships at sea and aircraft in flight.
Spire has approximately $ 265 million in cash on its books upon completion of the transaction, up from the $ 408 million the company expected when the merger was announced in March. A Spire spokesperson noted that public shareholders have requested the redemption of approximately 90% of the company’s outstanding shares – a large amount for a company going public.
But Platzer is unimpressed by the redemptions, and states that the money the company is receiving is “more money than the Spire has ever had and has spent and used to this point in its nine-year history.”
“It is a very unusual position that we feel so exceptionally well capitalized,” said Platzer.
Specifically, Spire posted $ 36 million in revenue last year and expects to nearly double that to $ 70 million in 2021. However, the company needs to grow its customer base much more to reach $ 1.2 billion in revenue by 2025, as forecast in its investor presentation.
Peter Platzer, CEO of Spire, poses with a ceremonial bell on the New York Stock Exchange (NYSE) during its listing in Manhattan, New York City, USA, August 17, 2021.
Andrew Kelly | Reuters
The company currently has more than 110 satellites in orbit, in what Platzer calls the “largest multi-purpose constellation in the world”. Spire also has ground stations in 16 countries with more than 70 antennas to quickly receive the satellite data and enter it into its analysis platforms.
“The starting point for us is a fully established global infrastructure,” said Platzer. “Everything is ready, everything is operational to a very high degree – processing terabytes of data, shipping to hundreds of customers.”
Now Spire is focused on “monetizing that data,” he said, which it sells to customers as an annual subscription. Platzer said Spire’s annual subscriptions range anywhere from tens of thousands of dollars to “very high” millions.
Platzer cited the example of an oil-focused commodities trader on Wall Street who not only wants to know on the supply side “where the ships are, but where they will be,” but then uses Spire’s analytics platform to look at the demand side. which is driven by the weather. “
Spire does not expect to expand its constellation of Lemur satellites as they are updated over a three year hardware replacement cycle. The company has “made tens of thousands of software upgrades in the past few years so that orbiting facilities produce two to three times as much data,” said Platzer, and the company sees “no customer demand” from a larger constellation of satellites.
Spire’s growth strategy is “land and expand,” said Platzer.
“You go into a specific use case, you get some customers, you grow those customers, and then you build around other customers,” added Platzer.
The company currently has offices in four countries – the US, UK, Luxembourg and Singapore – and customers in nearly 30 countries.
Platzer presented a four-pronged growth strategy for the future of Spire: recruitment, geographic expansion, new data streams and inorganic opportunities. Spire will focus on strengthening its sales, marketing and product teams in the near future. On the international side, Spire aims to attract customers in the Middle East and Asia, Platzer said, and as a “NYSE-listed company, opening doors carries a lot of weight”.
Ultimately, inorganic growth opportunities would include adding new technology or new capabilities to the Spire platform. One such capability the Spire hopes to add is optical links between satellites, which “would dramatically reduce data latency,” Platzer said. Spire has successfully tested radio frequency links in orbit, but inter-satellite optical links would take its capabilities a step further.
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