On March 25, 2021, a satellite image of the stalled container ship Ever Given in Egypt’s Suez Canal was obtained. Satellogic Satellogic, a satellite Earth imagery company, announced on Tuesday that it will be the latest in a long line of space companies to merge with SPACs. Satellogic is combining with CF Acquisition Corp. V, a Cantor Fitzgerald-sponsored special purpose acquisition company that trades under the ticker CFV. Satellogic will be listed on the Nasdaq under the symbol SATL, giving the space firm a $1.1 billion equity valuation. The deal is scheduled to finalize early in the fourth quarter. A SPAC, or special purpose acquisition company, acquires money through an IPO and utilizes the profits to buy a private company and bring it public. Satellogic already has 17 imaging satellites in space, but that’s only a tenth of what it’ll need to generate almost $800 million in annual income in four years. “By 2025, we’ll have a full [satellite] constellation of 300 satellites, allowing us to receive daily remaps of the entire planet,” Satellogic CEO Emiliano Kargieman told CNBC. “We believe that will fundamentally alter the way businesses make decisions on a daily basis.” Through funds raised by CFV and a $100 million PIPE round led by SoftBank and Cantor Fitzgerald, the agreement is expected to provide approximately $274 million in funding for Satellogic’s expansion. Since its foundation in 2010, Satellogic has raised over $100 million in venture capital and debt, with existing investors including Chinese juggernaut Tencent, Brazilian venture capital fund Pitanga, and the Inter-American Development Bank. “Satellogic is in a unique position to take over the Earth Observation market. Its technology, data, and analytics offer a wide range of applications in a variety of industries “Howard Lutnick, chairman and CEO of Cantor Fitzgerald, said in a statement. CFV’s stock increased 1.6 percent in trading after closing at $9.71 the day before. Satellogic is headquartered in Montevideo, Uruguay, with 240 workers worldwide, and its research and development team is located over the border in Argentina. Spain, Israel, the United States, and Beijing are among the company’s other locations. Satellogic is the latest in a long line of space companies to go public via SPAC agreements, with Virgin Galactic being the first of the new breed in 2019. Astra, a rocket company, and AST & Science, a satellite broadband company, have already began trading, with Rocket Lab, Spire Global, BlackSky, Redwire, and Momentus anticipated to follow in the following months. The technology The company’s NuSat satellites are approximately the size of a kitchen dishwasher and weigh about 42 kilograms (93 pounds) each when launched. Earlier this year, Satellogic signed a multi-launch agreement with SpaceX to launch the remaining 300 satellites for its “Aleph” constellation, which is named after a short story by Argentinian writer Jorge Luis Borges “about an object that allows you to see everything that is happening in the world,” according to Kargieman. Vertical integration helps Satellogic to achieve “60 to 100 times better unit economics than any other participant in the small satellite industry,” according to Kargieman. The current NuSats can cover 300,000 square kilometers of Earth in a day and collect photographs at 70 centimeters per pixel. Kargieman claims his company offers unit economics that “none” else in the Earth photography market can match, with a cost of $450,000 per satellite. “For the defense business, you don’t really have to focus on unit economics as much because they’re willing to pay a different price point for the data,” Kargieman said. “If you genuinely want to deliver to mainstream applications, as we do, you have to be able to do it at zero marginal cost,” says the author. The marketplace The demand for Earth imaging is dominated by defense and intelligence agencies, although applications for the energy, insurance, agriculture, and forestry sectors are expanding. According to Euroconsult, a space research group, satellite imaging has a total addressable market of $140 billion. “We believe this is a winner-take-all or winner-take-most market,” Kargieman explained. “This is a supply-limited business; for now, governments can’t collect enough data; there aren’t enough satellites in the sky.” By 2023, Satellogic hopes to be able to map the entire planet monthly, and daily by 2025, in order to tap “over $40 billion” in market prospects. “We’ll also be able to return sites of interest roughly every five minutes,” Kargieman added, “so we’ll be able to do things like give you a two-minute long video of any event that’s happening throughout the world.” A use case example involving oil pipeline monitoring was highlighted in Satellogic’s investor presentation, as Kargieman noted the company performed a test program with a big oil and gas organization 18 months ago. Every other week, the corporation had to monitor around 1,800 miles of pipeline, which cost about $750 per mile to verify with planes. According to the business, Satellogic “demonstrated equivalent detection capabilities at costs of less than” $60 per mile. China While Satellogic’s global presence allows it to engage with US friends, and the business has a local subsidiary called Satellogic North America that works with the US government, the company is also betting on China through its Beijing office. “We believe the Chinese market for commercial applications will be very interesting, and it is a nascent market for observation,” Kargieman said. “It is growing from practically scratch because Chinese companies have not been allowed to build technology to deliver data to the commercial market so far.” The CEO declined to comment on concerns about many Chinese enterprises’ government ownership structures, instead stating that Satellogic is focused on private players. “In China, we’re selling information about what’s going on inside China to commercial entities in the market for consumption inside China, so we don’t see any difficulties,” Kargieman added. Objectives for expansion Satellogic made no money last year, but expects to make about $7 million in 2021 because to new contracts that started paying out in April. “We were testing more technology in orbit, upgrading the technology, and verifying the business concept up until last year,” Kargieman added. According to an investor slide deck, the company has a backlog of around $38 million in signed contracts and expects a “near-term pipeline” of $800 million in prospects over the next two years. However, in order to become profitability by 2023, Satellogic will need to produce more than $100 million in yearly revenue. After that, the business expects capital expenditures to remain modest as revenue rises, with a goal of generating $255 million in free cash flow once the Aleph constellation is fully operational. CNBC Pro can help you become a better investor. Get stock recommendations, analyst calls, exclusive interviews, and CNBC TV access. 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