Forecasting Fortune

$2.8 trillion. That’s the amount that businesses will lose globally due to bad weather this year. “Weather impacts everything we do. Extreme variations in weather are occurring with greater frequency and since we do not have access to proper data to predict weather more accurately, we are losing trillions of dollars,” says Peter Platzer, founder and CEO, Spire. This San Francisco-based company is hoping to change all that by collecting data through a constellation of small satellites and making weather forecasts more accurate. 

Currently, about 94% of the data that goes into weather forecasting comes from a handful of satellites. “They are costly, have the same technology as a 486 computer and yet, there aren’t enough of them,” says Platzer. Space was always an interest area for him since he started his career in 1990s, but he sensed that he couldn’t make a business out of it. So, he pursued a career in finance and spent over a decade in Wall Street. While the executive program in Singularity University rekindled his interest in space in 2009, it wasn’t until he wrote his research paper on nano-satellites for his post graduation at International Space University in France, did he realise that there was a huge opportunity in small satellites. He and his two classmates formed Spire in 2012. “When we started the company, we looked at what is the competitive advantage of small satellites, where numbers matter and not size. If size mattered, it didn’t make sense to compete. We wanted to focus on data and the only way to get them is from satellites, and that too a large constellation of satellites,” says Platzer, who is a physicist with an MBA from Harvard. He says that they chose not to go down the beaten path of tracking landmass, which makes up one-third of the earth since others were already doing it. Instead, Spire focuses on gathering data from the two-thirds of the earth, primarily oceans, where satellites are the only possibility to collect data and uses radio frequency to monitor weather patterns and track assets rather than take pictures. “We are a listening constellation of satellites,” he explains. 

Spire uses GPS satellites to measure global weather patterns. Spire satellites, which orbits close to the Earth, listens for GPS satellite signals — which are impacted as they pass through the atmosphere. Using a process called GPS radio occultation, Spire measures the change in GPS signals to calculate precise profiles for temperature, pressure, and humidity, which can be used in weather forecasting to improve its accuracy. “Spire’s GPS radio occultation data will completely change weather forecasting as the world knows it today. It’s a technology that gets better with more satellites in constellation, and fits Spire’s expertise of building CubeSats and launching them into space regularly. The amount of data that will be streaming from Spire CubeSats each day in the next couple of years will be extraordinary,” says Mike Collett, managing partner, Promus Ventures. The venture firm led the Series-B investment of $40 million in Spire in 2015, along with Bessemer Venture Partners and Jump Capital, with previous investors like RRE Ventures and Lemnos Labs. Spire had earlier raised $25 million in its Series-A round in 2014 and over $1 million in its seed round. This year, Spire satellites will provide ten times more GPS-radio occultation-based weather data than the sum of all publicly funded weather satellites.  

The company also offers geo-location services to maritime customers who want to track their ships and protect their assets from pirate attacks, and for governments who want to counter illegal fishing operations. Platzer throws some interesting numbers our way. “80% of the global trade is carried out by ships and 80% of the time we don’t know what’s happening to them. Businesses lose $6 billion due to pirate attacks every year and $20 billion is lost due to illegal fishing annually, not to mention, billions of dollars being lost in collision and routing accidents. Our satellites relay critical information from any ship no matter where it is, to its owners and have that kind of transparency on what is happening in the middle of the seas is unprecedented,” says Platzer.

Spire’s major clients include shipping companies, governments, hedge funds monitoring the movement of oil, mining companies and ports. “Spire’s early focus on collecting global remote sensing data for weather, enabled them to sign up with large customers. The optionality of the platform is vast, as the company offers weather and asset tracking,” says Collett. For instance, government authorities use Spire Sense to combat illegal fishing. All shipping vessels carry AIS transponders and many fishing boats that fish illegally turn off their transponders. Now with Spire Sense, authorities can detect the time and position of ships when they disable their tracking equipment. Mining companies and retailers that use contracted vessels to ship their goods across the world now have real-time access to the position of ships that ferry their goods. 

Up in the sky
The company is building a batch of satellites every six weeks and has a launch slated over every 4-6 weeks. Platzer believes the rapid iteration cycle helps them get better with every launch. “Software is improving on an exponential basis, and we are trying to move whatever we can to it, which means we can upgrade the technology even when the satellites are in orbit,” he says. Each of Spire’s Lemur-2 satellites cost less than a million dollars to build, and is made of consumer electronic components used in smartphones since there is a considerable overlap. “The design criteria for smartphones today is that it has to be smaller, lighter, and more power efficient. These are the exact same things we want in space. So we are taking the innovative technologies emerging from consumer electronics and putting them in space. What we are building is truly exponential space technology,” he explains. 

Spire, which currently has 13 satellites in orbit, hopes to have 70 satellites by the end of next year. “We have about 16 launches from now up to the end of 2017. We are on every rocket that is being launched into lower orbit, between 400 and 650 kms,” says Platzer.

Spire recently won a contract from The National Oceanic and Atmospheric Administration to provide weather data as part of a pilot program that could pave the way for the government to increasingly use data generated by commercial satellites. This is not a validation of the accuracy of the data provided by Spire, but it could be a huge opportunity for them. Platzer says that there is a new use case emerging for their data from newer industries every day. “Two or three decades from now, a significant part of the global GDP will be driven by the data that is collected from satellites. If you have access to all the data you can possibly get, then you can overcome any challenge that may come your way by making better-informed decisions. We will enable that since we collect the data that no one else can,” signs off Platzer.