SEATTLE — Capella Space has raised $60 million to help the company accelerate its constellation deployment and meet growing demand for its synthetic aperture radar (SAR) satellite imagery.
The company announced on Jan. 10 that it had raised growth equity funding from the US Innovative Technology Fund. The fund was created last year by Thomas Tull, a former billionaire entertainment industry executive, to invest in technologies he believed were essential to the country’s competitiveness.
“Technological competitiveness is vital to the future of our country,” Tull said in a statement on the investment. “Capella’s state-of-the-art SAR technology allows us to have accurate, real-time information about what is happening on our planet, enabling decision-makers to make critical decisions on pressing geopolitical challenges more quickly.”
“Thomas is looking for dual-use businesses: they’re important to national security and governments, but they also have applicability in the commercial world,” Payam Banazadeh, chief executive of Capella, said in a Jan. 11 interview. “He really believes in SAR and it’s becoming more and more important for national security.
The funding, he said, will allow the company to scale up development and launch of the Acadia line of SAR satellites, with improved resolution and image quality, announced in August. He said Capella is planning “many” Acadia satellite launches this year, but declined to provide a more specific estimate. It also has two other former Whitney-class satellites to launch.
“We’re growing the team across all departments — engineering, sales, marketing — so we can move faster and meet the demand we’re seeing,” he said. “This will allow us to respond to the large peak in demand that is coming our way.”
This request was partly prompted by the war in Ukraine, which Banazadeh said demonstrated the value of SAR images that can be collected day and night and in all weather conditions. “What Ukraine has done is show other customers that SAR is an essential tool,” he said. “We see demand coming from everywhere, not just Ukraine.”
Capella emphasized working with governments. Banazadeh said the majority of the company’s business comes from government customers, with the majority coming from US government agencies. This comes from a product-market fit between what Capella’s satellites can deliver and the needs of government customers, an urgency these customers have for SAR imagery, and supply constraints. “They want more. They don’t have enough,” he said of such images.
He said the company, whose annual revenue tripled in 2022, expects continued strong growth from government customers, while demand from commercial customers grows at a slower rate. “Business growth will slow down but it will, at some point, pick up,” he said. “We’re just being realistic about the position of the commercial market for SAR versus the government market.”
The 200-person company added about 80 to 90 people last year, Banazadeh said, and expects similar growth in 2023. He said the company is struggling to find talented people “in all areas,” from satellite engineering to sales, but that the company’s hiring approach has worked well so far.
Capella’s new funding round comes less than nine months after raising a $97 million Series C round. Banazadeh described this new funding round as “opportunistic” given the interest from the US Innovative Technology Fund as well as the uncertainty surrounding the market in the near future.
“I think anyone who can raise capital in this market should, and they probably should raise more than they think they need to,” he said. “Having a full war chest for a few years and making sure you’re ready for whatever’s to come is going to be important.”
He said the company will continue to look for opportunities to raise more money that will allow it to invest in efforts like its new satellites that can accelerate revenue growth. “There is a lot of capital that needs to be deployed in the right places. We have a lot of plans, we have a lot of things we can do to grow even faster,” he said.