The US Space Force continues to demonstrate that it is a strong partner for space entrepreneurs and represents a huge opportunity for commercial space in the coming decade. At the first Space Force Pitch Day last week, the new service demonstrated rapid acquisition capabilities by awarding $32 million in Small Business Innovation Research Phase 2 contracts to 19 companies the same day (See SpaceNews article for a summary of the 19 winners). https://spacenews.com/space-force-awards-32-million-in-contracts-to-startups-and-small-businesses/
At the same time, the Air Force Research Lab and Space Force have launched an innovation hub, SpaceWERX, providing more tools for startups to engage and tap into government opportunities. The Space Force is looking to speed up technology acquisitions and develop future space capabilities by harnessing commercial innovations to maintain US space superiority. In this article, we discuss the US Small Business Innovation and Research (SBIR) and Technology Transfer (STTR) programs and other ways for startups to engage with Space Force to tap into this non-dilutive funding and help develop future space capabilities.
The SBIR/STTR Programs have 11 participating US federal agencies including the Department of Defense (DoD). The purpose of these grants is to drive innovations in industries critical to the nation’s long-term competitiveness and growth. It’s sometimes referred to as America’s Seed Fund and has backed many of today’s tech giants. The US federal R&D budget for SBIR/STTR is approximately $3.5 billion per annum (around 3% of overall government R&D budget). Phase I is proof of concept and typically ranges from $50,000 to $250,000, Phase II is between $750,000 to $1.6 million for prototyping. Phase III contracts support commercialization and does not have a limit on contract value.
Although the first Pitch Day was more focused on space domain awareness and cloud enable space enterprises, SpaceWERX has opened the aperture of engagement by offering a Phase I Open Topic Small Business Technology Transfer solicitation. Open Topics allow startups and researchers to propose technologies to the services that have not been included in the past. Some areas of interest include high bandwidth data communications and space logistics. In the past, DoD procurement of commercial services have been primarily satellite communications and launch, but the service expects to introduce commercial capabilities in all mission areas going forward including ISR (Intelligence, Surveillance and Reconnaissance), weather, logistics and in-orbit services.
At Seraphim Capital, we see the Space Force as an invaluable partner for the growing new space ecosystem in developing dual-use (government and commercial) applications and creating new markets. It provides tremendous access for startups to collaborate with government and other stakeholders. Entrepreneurs get mentoring support and could obtain commercial and technical validation through user feedback and government testing, and contract awards.
Other ways for space entrepreneurs to engage the Space Force include:
Catalyst Accelerator is located in Colorado Spring, CO with close proximity to 11 military bases and 30 national labs alongside space-based DoD units. This provides customer discovery opportunities for startups. The accelerator provides relevant business development training and connect entrepreneurs with potential DoD operators and customer. Accelerator topics have included Terrestrial Weather, Position, Navigation, and Timing, Resilient Commercial Space Communication, Space-Based ISR, Data Fusion, Cyber for Space Applications, and On-Orbit Servicing, Assembly, and Manufacturing. For startups, this means more and rapid customer discovery and business acceleration. Participants are assigned a Space/Air Force liaison to help navigate the DoD and a commercial Sherpa. Each cohort has a unique and specific focus area.
Hyperspace Challenge is a business accelerator run by the Air Force Research Lab and CNM Ingenuity for the US Air Force, in Albuquerque, New Mexico. Registration is open until September 1 for its 2021 accelerator cohort. The mission needs for the upcoming cohort involves Space Situational Awareness. The Accelerator provide discovery sessions, where startups get to interact with the government to jointly develop ideas that can address their needs.
The Space Enterprise Consortium membership provides access to engage and collaborate on development of new technology solutions for operational and warfighter readiness of the US military. The Space Enterprise Consortium, known as SpEC, is a group of more than 800 of space and defense companies that compete for technology development contracts. Companies develop prototypes under agreements known as Other Transaction Authority, or OTAs, which move faster than traditional government contracts and allows SpeC to solicit bids from commercial startups and non-traditional players. Under a10-year agreement with NSTXL, the consortium manager, members will compete for up to $12 billion in projects over that period. Technology areas include space system/architecture mission design and operations. Launch, Electronics, Ground Segment, Mission Payloads, AI/ML, Spacecraft subsystems.
Public-private partnerships are crucial to advancing space technology and defending America’s military interests in space, said Joy White, head of contractor activity for Space Force and executive director of its Space and Missile Systems Center. Organizations such as SpaceWERX and the Space Enterprise Consortium can help accomplish this, she said. “We have to find ways for small businesses and startups to reap the rewards of their precious investment of time, dollars and effort to build solutions for the government,” she said. “Our role is to clear the path for those longer-term, sustainable contracts that these solutions can be plugged into.”