HEO develops cameras that inspect and monitor satellites in space, and has raised a $37 million Series B from the NRF, Beaten Zone Ventures, Airtree and Salus Ventures.
Key Takeaways
- Space tech startup HEO has raised a $37 million Series B.
- The round was led by Beaten Zone Venture Partners and saw the National Reconstruction Fund (NRF) tip $10 million into the startup.
- HEO makes cameras which are launched into space and used to inspect satellites and surveil the cosmos on behalf of allied nations.
- HEO has a major five-year contract worth over US$100 million, co-founder William Crowe said, as well as another multi-year, seven-figure deal.
- The startup’s team of 36 working on its product and technology will grow to 85 by 2028 thanks to the funding.
- HEO will use the funding to get more of its cameras in GEO, or Geostationary Earth Orbit, where many of the most valuable and sensitive satellites live.
- Also participating in the round were earlier investors Airtree and Salus Ventures, as well as US firms
Key Background
HEO has a network of more than 50 cameras which operate in space, some it accesses through deals cut with satellite operators and others it has made itself. The cameras have applications for both commerce and defence: they can be used in the former arena by assessing the maintenance and repair needs of satellites, and in the latter by surveilling neighbourhoods of space for untoward activity by rival nations.
HEO got its name from high-earth orbit, where the founders initially thought they’d mostly be operating. In fact, most of its network is in LEO, or low-earth orbit. However, that will soon change. The game, according to co-founder William Crowe, is to get into GEO – geostationary Earth orbit, which is where the action is.
“It’s where a lot of national security missions are, it’s where the NBN satellites and Optus satellites are,” Crowe said. “There’s a lot of funny business going on up there… Russian and Chinese satellites approaching allied machines… but we don’t exactly know all of it because there’s not enough cameras in that orbit.”
The startup’s business model in a sense relies on that scarcity. Crowe says the market will be won by the company that can get the most eyeballs up in space, and contends that a shortage of space-grade camera production is a boon for HEO. The startup began manufacturing its own products in-house five years ago, Crowe added.
The NRF, the federal government’s $15 billion fund to stimulate advanced manufacturing, has made several other investments in Australia’s burgeoning space tech sector. It has backed unicorn Gilmour Space Technologies, Hypersonix Launch Systems and Southern Launch.
Other participants in the round include defence investors Beaten Zone Venture Partners and Salus Ventures, Airtree, Ten13, US investors Deepwater and DCode Capital, Northern Territory VC fund Paspalis, and Go1 co-founder Vu Tran.
Big Number
US$100 million. HEO’s biggest customer has signed a contract worth over that amount. Though Crowe would not identify the customer, he did say HEO is about to enter year two of the five-year agreement. It has so far realised about 5% of that value, with most of the cash to be generated when HEO starts operating in GEO.
Crucial Quote
“We think the application for both private and public markets is very significant and we feel good about our entry price on behalf of the taxpayer given that growth opportunity,” said NRF CEO David Gall.
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