Turning Earth Into Data

A cornerstone for modern-day analytics  

The global Earth Observation (EO) market is set to grow at 23% CAGR between 2021–2025. It relies on physical, chemical, and biological data obtained with ground-based techniques, e.g., thermometer, and progressively more on satellite data including advanced photo, radar, thermal, and sonar imagery.

• EO is critical for weather forecasting, responding to natural disasters, floods, fires, tracing wildlife, measuring deforestation, predicting and mitigating climate change.
• The data analytics is the highest growth (~40% YoY) segment, for a TAM of 12bn.

Numerous applications for global daily well-being

EO has become an inseparable part of the modern-day data pipeline, given the dramatic impact human activity has on the environment and climate systems. EO helps to control, predict, and improve the Earth systems for the benefit of all.

• The data from the orbit is so important that over 90 governments have partnered up as part of GEO, the Group on Earth Observations, to develop new projects and facilitate synergies from the investments in the EO.
• The U.S. National Reconnaissance Office (NRO), one of the biggest customers for commercial imagery, uses ~50’000 commercial satellite images per week.

AI unlocks space as a new frontier of Earth observation

Powered by AI and Machine learning, data analytics players blend several sources within a single platform and deliver turnkey data directly to customers. Given that space provides unique datasets, EO, precision agriculture, and IoT tracking benefit from cheaper access to space and powerful AI-enabled analytics.

• Players such as BlackSky are natively built with AI in mind, and together with other players using satellites, e.g., Planet Labs, are rapidly gaining market share.

Integrating Space Datasets Is A Game Changer

Essential for global security

EO is an essential component of the modern national security framework for general traceability, infrastructure monitoring (points of failure, planning), and reducing the impact of natural disasters such as floods, fires, and earthquakes.

• After the recent volcano eruption in Tongo destroyed telecommunications cables and cut off the island, constellations of small EO satellites showed the location and magnitude of post-eruption floods, smoke, and ash.
• When clouds and smoke obscured the electro-optical imagery of a disaster area, the sector relied on newer SAR satellites to see through ash and clouds.

Climate change fuels the need for satellite imagery

The higher recurrence of climate-change-related events is reaching the tolerance limit and is stressing the need for space imagery and analytics. Earth monitoring is vital to study the impact of climate change, prevent climate-related disasters, and help maintain agricultural yields likely to suffer from deteriorating weather conditions.

• New technologies such as synthetic-aperture radar (SAR) increase image resolution and constantly improve the sector’s value proposition, e.g., crop monitoring has become possible in all weather conditions.

The differentiating factor for many industries

Space observation may provide unique data and thus a competitive advantage to the commercial sector, e.g., actionable data for better decision-making to solve business problems, exceptionally viable in insurance, finance, and logistic sectors.

• Orbital Insight uses computer vision and machine learning to analyze satellite imagery and estimate how much oil is being stored in China at any given time.
• Planet Labs tracks tankers worldwide, assesses supply chains, analyzes economic activity, monitors assets and risks in real-time.

At The Heart Of Every Measurement

At the core of strategic decisions

With over 900 EO satellites monitoring the Earth from space, there is a massive commercial opportunity for Earth watching.

• The U.S. National Reconnaissance Office (NRO) has been paying Maxar ~$300mn per year to access the company’s high-resolution satellite imagery and archives.
• NRO is in the process of awarding a new multi-vendor contract which will most probably be larger than $300mn/y and include Planet Labs, BlackSky, and Maxar.
• In 2020, Norway partnered with Planet Labs, Airbus, and KSAT to create and provide access to a database of satellite imagery of 64 countries to monitor deforestation and deploy land clearing missions.

Space is giving a second breath to the sector

Integrating satellites into EO is not new, but today, the market is fueled by decreasing launch costs and is in pursuit of creating Low Earth Orbit constellations, which we introduced last year, for unparalleled global extensive coverage.

• EO is a natural fit for constellations and low earth orbit, which enable better quality or lower optics size and several passages per day over a given point.
• Already in 2008, more than 150 EO satellites were in orbit, generating more than 10TB of data daily. The number of satellites is 7x larger today.

An irreplaceable tool for governments and regulators

EO is an integral part of the DPSIR framework (seen on the right graph) used for modern decision-making. EO is essential to measure and quantify the most critical components such as pollution, land use, quality of biomes, biodiversity loss, etc.

• Using EO, governments may assess the effectiveness of various responses to measures put in place, e.g., carbon tax, land use tax, etc.

The Earth Is Already Being Observed

Never-ending demand from customers

Earth imagery enjoys growing demand, with customers signing multi-year contracts and partnerships, boosting the sales to a 60-80% YoY growth rate.

• NASA, NRO, National Geospatial Intelligence Agency are the biggest users of EO.
• Palantir has partnered with BlackSky to integrate SpectraAI to provide high-resolution imagery and deep analytics.
• The increase in resolution, from 10m in 1995 to 30cm today, and available for non-government users, attracts even higher interest for space imagery.

The rising star of Earth Observation

Planet Labs provides daily satellite data that helps businesses, governments, researchers, and journalists monitor the Earth through a scalable subscription model.

• Planet gathers daily global imagery and thus has images before and after any event, making it a no-brainer partner for global emergency and relief responders.
• In October, Planet announced a transition to a new Pelican satellite by 2023, offering reduced latency, increased resolution (up to "see road markings"), and up to 10x daily revisit frequency.

AI meets Earth Observation for unparalleled analytics

BlackSky combines its satellite constellation with a collection of sensors, signals, other data sources and feeds it to its analytics platform, Spectra AI, for powerful big data analytics, forecasting, and unique business intelligence insights.

• In February, BlackSky provided imagery and analytics to respond to a ferry fire in Greece.
• Only in the 4Q21 has the company doubled its fleet and could provide imaging and analytics within 3 hours and at a peak rate of 15 revisits per day.

Catalysts

• Skirmishes and low-level wars. Increased cross-border tension would force increased spending on public and country security, especially Earth observation and traceability.
• Extreme climate events. Increasing the recurrence of climate change events, natural catastrophes, and insecurity will fuel the sector as countries would start relying even more on advanced analytics and imagery.
• Next gen technology. Newer and better radars, algorithms, or analytics platforms would deliver user-friendly actionable data on an automated basis with better refresh rates and will be a massive trigger for market adoption.
   

Risks

• Privacy concerns. The public is already not at ease with global surveillance networks and a growing installed camera base. Should the EO start raising privacy concerns, sector growth would be considerably slowed.
• Reliance on few but large customers. Being a relatively young industry with companies only entering the public markets, losing a significant revenue stream from large customers may dissuade investors from supporting EO.
• Early-stage failures. As the sector is only in the early adoption stage with significant upfront costs, we may see companies such as Satellogic with interesting businesses fall flat.