Update May 12, 2023: Luca Rossettini, aerospace engineer, ceo and founder of D-Orbit has been named among the finalists for the European Inventor Award an award dedicated to outstanding inventions patented at the European Patent Office (Epo)
Disclaimer: this is a long article. So first...
It was announced a few days ago that the start-up D-Orbitwould soon go public on the Nasdaq through Spac Breeeze Holdings, with an agreement valuing the company at USD 1.3 billion. This was discussed, inter alia, on Corriere della Sera , Startup Italia and Forbes. Founded in 2011 by Luca Rossettini, Alumnus in Aeronautical Engineering and PhD, together with Renato Panesi (CEO and CCO, respectively), D-Orbit is based in Fino Mornasco, in the province of Como. It provides products and services for the new space market.
Last year the company reported 3.4 million dollars in revenues, with an expected growth to 22 million dollars in 2022. It currently has an order portfolio of $12.5 million, though has ongoing negotiations for additional $167 million. The company expects to become profitable on an EBITDA basis by 2024, so its revenues need to grow to approximately $445 million. The company has made headlines both because of the speed of growth of the now former start-up and because of the growing interest in the commercial and pioneering aspects of space exploration.
The Alumni editorial staff met Rossettini to ask him some questions. We ended up learning a lot about the new space markets and the Italian effects of this expanding industry. Let us tell you about them.
The Falcon 9 rocket, which took off from Cape Canaveral on 13 January, also carried the ION Satellite Carrier di D-Orbit. Once in orbit, ION took care of the 'last mile' delivery, carrying satellites to their respective operational positions. “In the new space, this is called last mile delivery”, says Rossettini. “A bit like a courier truck, we go around space delivering packages door-to-door, i.e. carrying satellites where they are needed”. This service has radically changed the way satellites are sent into orbit: “it saves up to 85% of time and up to 40% of costs”.
D-Orbit was the first company to offer this type of service in space logistics, though this is only one of its activities. “Once the packages are delivered, we have a fully functioning 'truck' in orbit,” continued Rossettini. “Instead of making it return, the satellite can be used for other things, such as in-orbit demonstration and validation operations.” It can normally take years to get a piece of technology into orbit; D-Orbit ensures testing within a few months. This is an example of how advanced space logistics services represent a go-to-market accelerator for many high-tech companies, and beyond. “The end-users of our services come from a wide range of sectors, from oil and gas to services and agriculture”.
Since he comes from the Veneto region, jokes Rossettini, he likes concrete examples: a satellite is a bit like a pig, nothing gets thrown away.
"Another goal we are working on is to create a cloud network in which each of these ION satellites, after completing their deliveries, will remain in orbit and act as a node to offer services to all the satellites needing them. We are not there yet, but in the near future our IONs will be able to exchange information with other satellites, carry out repairs, refuelling, reallocation, whatever can extend the life of our customers’ satellites. When they reach their very end, rather than destroy them by plunging them into the atmosphere as we do today, we can dismantle them and build service stations in orbit to store spare parts and raw materials. Once we have these capabilities, we will be able to get closer to our vision: a logistics and transport network connecting Mars, the asteroid belt, the Moon and Earth, allowing settlements on other planets to be maintained at a sustainable cost.”
Ready for the leap toward the latest frontier.
How come ‘new space’ is growing so rapidly? What good can it do us and what are the risks of this new gold rush? “All high-tech sectors are growing tremendously and many traditional companies are moving towards digitisation, Industry 4.0, Big Data and predictive information. Agriculture is becoming agritech, finance is becoming fintech, automotive is becoming autonomous driving and so on. To support this transformation, we need evolved information. And it all comes from satellites.”
More than 80% of the technology we use on earth is space-derived. Hence, space control has become an enabling requirement for technological and economic transformations on earth. Also the satellite market has changed, and D-Orbit understood this at an early stage, thus gaining a strategic advantage.
“In the past, a big satellite would be launched every now and then, costing 800 million and taking 15 years to produce; now, instead, much smaller satellites are being launched, which are up to 400 times cheaper. They also last less, but it doesn’t matter, since technology becomes rapidly obsolete. Besides, we need to move quickly and accurately. Logistics thus becomes an enabling infrastructure. I am reminded of Uncle Scrooge, who became rich not by panning for gold, rather by selling axes to gold diggers. That's what logistics is all about: we enable others to do better what they have to do, and it's them who decide how to use the tools we give them.” The risks are clear: space is difficult, it is a hostile environment, with unbearable temperatures, where anything wants to kill you. Things can go very wrong. Substantial amounts of capital are needed. You never know if the launcher will make it or explode But the rewards are great.
…and ask Rossettini the reason for D-Orbit going public just now. “When you establish a high-tech company you have to think about a form of exit for investors. So you can either be taken over or become a joint-stock limited company. We have always strived to achieve the second option. Why now? Because it is time to grow fast to maintain our leadership.” This is a very different business model from the one traditionally associated with the Italian context, marked by a constellation of SMEs and family businesses.
Are you telling us that our context is not suitable for high-tech industries?, we ask. “I am not an economist, my opinion is based only on my experience and relationship with investors and customers, from a high-tech point of view and as an Italian from the Veneto region (where most effective SMEs are based). The Italian model is based on short-term ROI: make a profit as soon as possible because that is what sustains the entrepreneur and his family. If you go public, the shares go away in big packages for small amounts. It is a model based on a regional market, which is somewhat protected and manageable. In the high-tech world you can never start from a protected market, you compete in the international arena from the very first day. You immediately compete with much better funded players than in Italy. Profit is no longer a way to remunerate investors, it is not the year-end dividends that interest them, rather the company’s exponential growth. So it is a different model, I don't know which one is better. The high-tech model is very recent, while the Italian one has proven to be solid in the long run. But the context was rather different in the past. We’ll see”.
What good is it for Italy to have success stories like yours? “Many great companies started from scratch, made it and are now a source of national pride, we do not wish to be an example to anyone. We try hard and do our best together with our local suppliers, who have become almost our partners. This moment has attracted for us a lot of media attention but we wish to convey the message that we are at the beginning of a new path. At local level, this will certainly have an impact on employment, reputational and practical benefits and an important drive for the wealth of the ecosystem around us.”
This is no small success if you consider that when you knock on an investor's door, the first question you are asked is: why should I invest in your company rather than in one of your colleagues in Silicon Valley? How to answer that question? “In terms of technology, Italy is second to none. In particular, we have always been pioneers in the space sector. In terms of technology, Italy is second to none. In particular, we have always been pioneers in the space sector: we were the third country in the world to launch a satellite into orbit, in the middle of the Cold War, after the USA and the USSR, with the billions of dollars they were investing. Our supply chain covers the whole value chain and we have a very good launcher, Vega. We also have other advantages, one of which is undoubtedly the quality of our engineers and our graduates in general, who are less specialised than others though more flexible. An Italian engineer, when faced with a problem, will certainly be able to give you good answers in a short time. This is an advantage especially for start-ups, which haven’t enough capital to hire a large team right away, thus seeking more versatile people.
D-Orbit could not have been established in another country:it is thanks to the creativity, resilience and willingness not to give up, typical of us Italians, that we have solved one problem after another. Another strength of the Italian model is that it is not over until it is over. In the Silicon Valley model, instead, the 'fail fast' mantra applies. The principle is correct: if you don't have a market, you shouldn't persist, but in most cases, giving up at the first opportunity means that you are not doing your duty as an entrepreneur".
Credits home/header: Courtesy of D-Orbit
