New funding values Chinese private satellite company GalaxySpace at $1.2 billion

GalaxySpace (银河航天 yínhé hángtiān) is a Beijing-based company founded in 2016 that makes small telecommunications satellites. Yesterday, the company announced (in Chinese) that it had taken in a new funding round that gave it a valuation of 8 billion yuan ($1.2 billion), making it “the first unicorn in China’s satellite internet industry.”

• The money is from a mix of prestigious private and government sources, including the state-backed CICC Infrastructure Fund.

The investment will be used to develop “satellite internet technology” and “low-cost mass manufacturing capabilities.”

• GalaxySpace’s announcement name-checks Elon Musk’s SpaceX and its satellite internet access project Starlink, and founding CEO Xú Míng 徐鸣 promises that his cheap broadband communication satellites will shorten the gap between China’s and America’s satellite mass-production capabilities “within two years.”

Xu and the company’s core management team mostly comprises former executives and technologists from Cheetah Mobile, an app and artificial intelligence development company that listed on the New York Stock Exchange in 2014.

• That team of mobile, data, and AI nerds who left Cheetah to found GalaxySpace two years after the mobile company’s IPO added a must-have to their management team: a man with connections and experience in China’s state aerospace and defense sector. Dèng Zōngquán 邓宗全 is the chairman of GalaxySpace’s technical committee. He is also the head of the National Defense Program 793, and the director of the mysterious “Aerospace Institutions and Control Technology at a National Defense Key Discipline Laboratory,” about which there is precious little public information — not in English nor in Chinese.

In January this year, GalaxySpace launched a “227-kilogram Yinhe-1 (Galaxy-1) technology verification satellite [that was] expected to test Q/V and Ka band communications at up to 10 Gbps,” reported SpaceNews.

• In the announcement of the new funding, Xu said the company intends to build a factory in Nantong, a city two hours’ drive away from Shanghai, that would be able to produce 300–500 satellites a year.

“Satellite internet” was added to a government list of new infrastructure priorities by the top economic planner National Development and Reform Commission in April this year.  

• In 2014, Xí Jìnpíng 习近平 elevated “Civil-Military Fusion” to a national strategy. The concept is roughly similar to America’s private sector involvement in defense technology and aerospace — think Boeing, Lockheed Martin, Raytheon: China hopes to use private money and innovation to strengthen China’s military prowess.
• The space industry was one sector encouraged by the initiative.
• Since 2014, about 100 private space companies have been founded in China. Per Wired, “They’re creating reusable rockets, sending payloads into orbit and quickly catching up with SpaceX.”