WEBVTT - Building Businesses in Space Leveraging Existing Infrastructure

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Business

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<v Speaker 1>Week with Carol Messer and Tim Steneveek on Bloomberg Radio.

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<v Speaker 1>We're talking about SpaceX, talking about Boeing, Blue Origin, Axiom Space.

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<v Speaker 1>Those are just a handful of the companies that operate

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<v Speaker 1>in the space economy. The World Economic Forum estimates that

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<v Speaker 1>the space economy will be worth one point eight trillion

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<v Speaker 1>dollars by twenty thirty five. Another company in that space

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<v Speaker 1>is Spire Global. Spier says it designs, builds, and operates

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<v Speaker 1>the world's largest multipurpose satellite constellation. It's a publicly traded

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<v Speaker 1>microcap valuation just about two hundred and fifty million dollars.

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<v Speaker 1>The stock up about twenty four percent so far this year.

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<v Speaker 1>A big part of that after the company in March

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<v Speaker 1>announced a partnership with Nvidia to advance AI driven weather prediction.

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<v Speaker 1>We've got back with us the founder and CEO, Peter Platzer.

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<v Speaker 1>He joins us from Geneva. Peter, good to have you

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<v Speaker 1>with us. We're gonna get the Nvidia partnership in just

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<v Speaker 1>a minute. But you operate in the maritime, weather, climate, aviation,

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<v Speaker 1>and government sectors. Explain what exactly your technology does in

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<v Speaker 1>the services that you offer clients.

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<v Speaker 2>Thanks so much to Michael, it's a pleasure to back here.

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<v Speaker 2>So for the last twelve years, Spire has been delivering

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<v Speaker 2>data and analytics from space to create a better future

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<v Speaker 2>on Earth. If you are looking for safe, for cheaper flights,

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<v Speaker 2>you know our products can help with that. If you

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<v Speaker 2>want your business to be better prepared for weather, including

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<v Speaker 2>extreme weather, you know our services can help you with that.

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<v Speaker 2>If you're looking for a more reliable, faster supply chain

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<v Speaker 2>with the lower carbon footprint, you know we can help

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<v Speaker 2>with that. Basically, we track activities all across the world,

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<v Speaker 2>be that ships, planes, of the weather to create a

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<v Speaker 2>more sustainable, prosperous, safer future for all of Earth.

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<v Speaker 3>So what's the Capex hardware that you guys actually have

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<v Speaker 3>to deal with or is it mostly data that you're

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<v Speaker 3>dealing with.

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<v Speaker 2>So we're dealing mostly with data we have because we

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<v Speaker 2>are fully integrated and annual cap has cost of like

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<v Speaker 2>five to seven million dollars that support and cause unlimited

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<v Speaker 2>amount of revenue. I mean, the company is way over

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<v Speaker 2>one hundred million in revenue and has been growing compounding

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<v Speaker 2>and a growth rate since twenty seventeen over one hundred percent.

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<v Speaker 2>But we are incredibly efficient and we collect the data

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<v Speaker 2>one and then we sell it many, many times, just

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<v Speaker 2>like any subscription company. And while the entry point originally

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<v Speaker 2>is incredibly high, getting space to work is difficult and

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<v Speaker 2>tricky once you have a crack that notts, which Spire

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<v Speaker 2>has with over six hundred years of space heritage. For us,

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<v Speaker 2>the maintenance of keeping that constellation up and up to

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<v Speaker 2>date and at the cutting edge of technology is just

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<v Speaker 2>five to seven million dollars a year.

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<v Speaker 1>Speaking of keeping that constellation up there, I want to

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<v Speaker 1>talk a little bit about deorbiting and how you were

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<v Speaker 1>able to address the deorbiting setback and how you've insulated

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<v Speaker 1>yourself from those risks going forward. So explain what exactly happened, right,

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<v Speaker 1>So this.

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<v Speaker 2>The Sun has an activity cycle that is so between

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<v Speaker 2>seventy and eleven years, and when it gets some more active,

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<v Speaker 2>it kind of like blows up the earth atmosphere and

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<v Speaker 2>it reaches higher and that creates increased friction and as

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<v Speaker 2>it has creates increased frictions with spacecraft. All of them

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<v Speaker 2>made the orbit a little bit sooner, and as spacecraft

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<v Speaker 2>get towards the end of their life, you know, for us,

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<v Speaker 2>that's you know, like four or five six years. Small

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<v Speaker 2>changes can make a big impact. And while we have

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<v Speaker 2>a very regular replenishment schedule, you know, there was there

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<v Speaker 2>was a bit of a mismatch. Now, our consolation is

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<v Speaker 2>software defined, so that means that we can change what

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<v Speaker 2>it does, which is exactly what we did. You know,

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<v Speaker 2>we increased some software capabilities to lower the data latency.

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<v Speaker 2>We added to our ground station network to create you know,

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<v Speaker 2>more robusters there. So you adapt to it because as

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<v Speaker 2>a fully integrated company, you know, we have the ability

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<v Speaker 2>to do that, and it's one of the huge advantages

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<v Speaker 2>that's FY has.

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<v Speaker 3>Where's your biggest growth.

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<v Speaker 2>So there are fundamental trends that we have been betting

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<v Speaker 2>on for you know, like you know, the whole time

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<v Speaker 2>of the of the existence of the company, in particular

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<v Speaker 2>climate change and global security, and they continue to be

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<v Speaker 2>in one hundred percent operation, driving demand for our products

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<v Speaker 2>and services forward. But in particular recently, you know, we've

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<v Speaker 2>seen some of the supporting trends that we indicated many

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<v Speaker 2>many years ago, the growth of the space sector, the

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<v Speaker 2>digitalization of the global economy, with data being the oil

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<v Speaker 2>of the twenty first century and AI and machine learning

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<v Speaker 2>further accelerating our growth. You know you mentioned it earlier.

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<v Speaker 2>You know we have seen contract sizes dramatically increase as

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<v Speaker 2>we are adding AI to mine our data for increased capabilities.

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<v Speaker 2>I mean we are applying and video chats and processes

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<v Speaker 2>for a number of years now because it gets us

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<v Speaker 2>to insights faster from the massive amount of raw data

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<v Speaker 2>that we collect.

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<v Speaker 1>This is a partnership within Video that you announced. Just

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<v Speaker 1>back in March, the company announced a partnership within Vidia

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<v Speaker 1>to advance artificial intelligence driven weather prediction. Any more deals

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<v Speaker 1>like this on the horizon.

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<v Speaker 2>Well, as a public company, I would wish to tell

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<v Speaker 2>you everything that is on the horizon. What I can

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<v Speaker 2>tell you is that we couldn't be more excited about

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<v Speaker 2>the demand side that we are seeing given those trends

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<v Speaker 2>and the capabilities that Spire has. For better or worse,

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<v Speaker 2>the threats from a global security perspective, as well as

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<v Speaker 2>the impact that weather is having on communities, countries, corporations

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<v Speaker 2>all across the world is not diminishing any time soon

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<v Speaker 2>than if anything, we see consistently and continuously increase. So

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<v Speaker 2>we love working with companies like an like an Aurora

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<v Speaker 2>Tech going GHC, which is using you know, our capabilities

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<v Speaker 2>and their capabilities and payloads to predict wild buyers and

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<v Speaker 2>detect greenhouse gas emissions. Companies like Hubble that connect space,

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<v Speaker 2>you know, from our technology and their technology to Bluetooth

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<v Speaker 2>devices and driving an IoT revolution to help on everything

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<v Speaker 2>from transportation to agriculture and much more. So, where we

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<v Speaker 2>see the demand coming from from those trends we see

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<v Speaker 2>to continue to accelerate and drive the growth of the company.

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<v Speaker 3>But Peter, how much in terms of industry, Like, I'm

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<v Speaker 3>trying to get an idea of just for our audience,

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<v Speaker 3>the specific industries like weather is obviously weather indicators, right,

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<v Speaker 3>It's a big part of what you guys do ship

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<v Speaker 3>in airline signals. So I'm just trying to understand exactly

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<v Speaker 3>where the growth is in terms of demand for what

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<v Speaker 3>you guys provide.

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<v Speaker 2>So when you think about you know, the global supply chain, right,

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<v Speaker 2>there's many many players there that are tackling that problem.

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<v Speaker 2>Do you have anything from harbors where they are like

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<v Speaker 2>five to ten thousand harbors like the harbor of Rotterdam,

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<v Speaker 2>one of the largest harbors in the world. The customer

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<v Speaker 2>of Spire that is using our data to improve both

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<v Speaker 2>the efficiency of its operation as well as it's greenhouse

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<v Speaker 2>gas footprints. Then you have the actual charter and shipping

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<v Speaker 2>companies which want to optimize the roots and in particularly

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<v Speaker 2>when they have sensitive cargo like for example, a temperature

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<v Speaker 2>sensitive cargo or perishable cargo, to optimize the spend that

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<v Speaker 2>they have on the cargo, with fuel being a massive

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<v Speaker 2>portion of the balance sheet and so SPIRES both tracking

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<v Speaker 2>and weather helps them reduce that. And then you have

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<v Speaker 2>the distribution on land, where again weather is making a

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<v Speaker 2>massive impact. So there already you have tens of thousands

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<v Speaker 2>of customers that are all operating the supply chain on

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<v Speaker 2>a global basis that are looking for Spire products. Then

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<v Speaker 2>you have the financial services companies. That's what I think

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<v Speaker 2>about insurance companies.

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<v Speaker 3>That's what I wanted to know. How much of your

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<v Speaker 3>business is to the financial area, So it.

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<v Speaker 2>Is not an overwhelming in Mount Carroll can be honest,

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<v Speaker 2>right it is. You know, we have literally you know,

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<v Speaker 2>dozens and hundreds of use cases, but we do have

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<v Speaker 2>a good portion of our business in the financial services industry.

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<v Speaker 2>But it is not a dominant industry. I have to

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<v Speaker 2>tell you. For our customer base.

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<v Speaker 1>How much of your business comes from governments, including the

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<v Speaker 1>European Space Agency and the United States.

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<v Speaker 2>About forty five percent, So less than half of our

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<v Speaker 2>businesses from the government side, okay, and more than half,

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<v Speaker 2>about fifty five percent is commercial customers.

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<v Speaker 1>You mentioned balance sheet, So I'm curious about your balance

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<v Speaker 1>sheet because you announced the registered direct offering of thirty

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<v Speaker 1>million dollars back in March. Anyw's how's your cash balance

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<v Speaker 1>right now?

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<v Speaker 2>Is that enough?

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<v Speaker 3>It just got about thirty seconds.

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<v Speaker 2>We have an extremely strong balance sheet, not least because

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<v Speaker 2>of the findar raising that we did in the first

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<v Speaker 2>first part of the year. It makes us feel very

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<v Speaker 2>very comfortable given that we have re announced that free

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<v Speaker 2>cashal positive is in the summer of this year's we've

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<v Speaker 2>already been adjusted EBA a positive and cash flow from

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<v Speaker 2>operations positive end of last year, so just at the

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<v Speaker 2>verge of producing our own cash, we feel very very

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<v Speaker 2>strong about our balance sheet.

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<v Speaker 3>All right, great stuff, So glad we could get some

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<v Speaker 3>time with you today. Peter Peter Platz, thank you. The

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<v Speaker 3>founder and ceof Spyro Global, joining us from Geneva