Closing Bell - Manifest Space: Simplifying Space Mobility with Morpheus Space CEO Daniel Bock 3/8/24

Episode Date: March 8, 2024

As the number of spacecraft has skyrocketed, so has the risk of collision. Morpheus Space, a space mobility startup, is looking to change the model around maneuvering satellites. CEO Daniel Bock joins Morgan Brennan to break down the one-stop satellite services shop—and building a subscription model to do so.

In 2015, there were roughly 1,400 active satellites in orbit. Today, there's an estimated 9,500. More spacecraft means more risk of collision, and a satellite needs to be able to move out of harm's way. In the past, maneuvering systems could be costly and not easily scalable to large constellations. Morpheus Space is trying to change that. CEO and co-founder Daniel Bach says the goal is to offer more mobility to connect space-based infrastructure with other industries.

We want to create, on the one hand, a real economy around space mobility. So to give you an example from the hardware perspective, we are offering our propulsion systems as hardware as a service, or also call it pay as you go so we were inspired by the aviation industry actually where you also yeah not buy the the engines for the planes but you pay by the hour and so we slightly adapted that concept that business model and offered that to the industry the first time and so so you basically only have to pay for what you use the propulsion system for. And that significantly reduces the barriers to entry on a financial aspect. The startup's pitch to customers? A one-stop satellite services shop. From software that analyzes and designs missions,

to hardware-based propulsion systems, offered on an hourly rate. On this episode, expanding space mobility, and building a subscription model to do it. I'm Morgan Brennan, and this is Manifest Space. Let's set the stage here, and that is, tell me what Morpheus Space is, what you do. Yes, so Morpheus Space is an in-space mobility company. And in short, or to summarize it, we move satellites in space in a smart, efficient, and easy-to-use way to address the challenges and limitations that we still have today surrounding in space mobility. So you could say that we help to move satellites like never before to really connect

the in-space industry with other industries that use the services of space-based infrastructure. So we're talking about in-space propulsion. Does that mean that you are working with and a supplier to the biggest makers of satellites? Yes, that's one part of our business. So we are developing and producing electric propulsion systems for satellites. so highly efficient means to propel, to move the satellite. But we are also developing software solutions to really leverage the capabilities of our technologies or propulsion in general. And we are supplying big constellations, but also smaller companies. So we really want to enable the broader space industry to leverage the new age of in-space mobility. As you can imagine, with the big constellations that

are currently built up, like SpaceX or OneWeb or Amazon Kuiper, a lot of satellites are going up into space. I think we have now already over 9,000 satellites in space and more traffic in space has also consequences if they are not managed properly. So there were incidents in the past, like in 2009, where a collision happened between a Russian satellite and an Iridium satellite, and that created a lot of debris that caused other consequences. So for example, it nearly damaged the Chinese satellite and also the International Space Station had to perform an avoidance maneuver.

And that was even before the 9,000 satellites in orbit. So these things will happen in the future more often. And you need proper propulsion systems, proper systems on board, but also autonomy solutions to avoid collisions, to move these complex machines in space with constraints due to the environment. And yeah, you need a lot of highly trained personnel up to date to perform, plan and execute these maneuvers. And so we are building also the tools and what you need to automatize maneuvers to plan for missions and to really create a dynamic space operations environment.

So it's the hardware and the software that you're targeting. And it sounds like from the software side, when you talk about building up the services piece of it or the, you know, that, that it's basically, it's like almost an idea of like mobility or, you know, propulsion capabilities from space as a service. Is that how I should think about this? Yes, it comes, comes close to it. So we want to create on the one hand, a real economy around in space mobility so to give you an example from the hardware perspective we are offering our propulsion systems as hardware as a service or we also call it pay as you go so we were inspired by the aviation industry actually where you also yeah not buy the the engines the planes, but you pay by the hour.

And so we slightly adapted that concept, that business model, and offered that to the industry the first time. And so you basically only have to pay for what you use the propulsion system for. And that significantly reduces the barriers to entry on a financial aspect. And in the end, that will also create an economy because you will have a transparent way of seeing, okay, how much is that maneuver? How much is that collision avoidance maneuver, for example? How much does it cost me to get from this orbit to the other

and really tie that to the services and also shift CAPEX to OPEX in the end. And I think that's the way to go to really propel the space industry forward. Is there that much demand on an hourly basis for that type of capability that it makes it worth it for you? I guess the basic question here is, how often do satellites need to be moved? That's a very good question. And I think there's no general answer.

We know that the frequency will increase over time. And so the power by the hour example is not completely valid for for us so we our time horizons are longer so we have like one year subscriptions um on and you pay it on a monthly base so um and you get a certain budget of uh mobility that you can use up over the time so it's not only hourly rate um it's a longer time horizon. And yeah, so that's maybe the difference. And the demand will significantly increase because you not only have to avoid collisions, ride share opportunities is also a major trend

that will further increase when one starship is ready for commercial use. And it's also about separating your constellation, changing the shape of your constellation. So that means that you are agile, you're really dynamically using your constellation and react to things that happen on Earth, provide better services, gather more high fidelity Earth observation data and services, and to really leverage space as an infrastructure that is dynamically set up, which is not the case yet. It is still quite static, statically organized.

So you plan on long horizons, you try to launch your constellation, for example, and then you just try to maintain it. And I think the trend in the future will go to a much more agile approach, dynamic approach that you can adjust flexibly how the satellite constellation is set up to serve more customers and provide better services. Really, maybe it's a basic question or a rudimentary question, but can you offer that type of one-year subscription model, for example, on a satellite that doesn't have your own hardware on it? Or do you have to first supply the hardware and the propulsion capabilities to be able

to do it? That's a very good question, Morgan. So we are not limiting our business model in general to our propulsion system. I think our technology has a lot of unique advantages, but in the end, you need to find the right propulsion system that meet your requirements the best way. At the moment, we are only providing

the hardware as a service, the pay-as-you-go model for our propulsion systems, but our platform, mission design and operation platform journey is also set up as a marketplace for other propulsion system providers, but also other subsystems like power, communication and everything that you need on a satellite. So we want to bring different players together, being selected by matching a mechanism in the platform. So you easily put in the basic requirements for emission and then you get a list of suppliers that meet these requirements. And it's an interesting question.

I think we might end up also offering that hardware as a service solution for other propulsion systems. But I think the first step will be to implement that on other subsystems, so like communication, energy, and all the resources that you need available on the spacecraft. That's really fascinating. It almost becomes a one-stop shop for whatever the requirements of the mission are. Is that a business that you expect? I guess, where are you in terms of the rollout of that business and how do you expect that to grow versus the propulsion business?

So we are still an early stage startup. So we raised our Series B, Series A around about one and a half years ago. We have now two products on the market, the Propulsion System and Journey, the platform. A third product will come to market in a few months. And I'm happy to share that then. And yeah, today I'm super excited also to officially announce the first time our new propulsion system on your show, Morgan. So our second generation propulsion system.

And that's still our bread and butter, I would say. But Journey, so the platform launched in November last year. We have significantly traction and a lot of customers lining up on multiple feature lines. So on the mission design and analysis part to plan your mission, but also on the subsystem provider part. So other companies that want to be included in the matchmaking on that platform. And yeah, how it turns out in the future, I think it will almost end up as a 50-50 distribution between the software offerings and the hardware offerings. Now, I mentioned you're the co-founder of Morpheus Space. How did you decide to start this company? Why did you see, what was it about the space economy at that moment in time that you said, you know what, there's going to be a need for this and I want to get ahead of it?

Yeah, so I'm a space engineer by background. I was always fascinated by space, especially the complex problems that you have to solve. And on the other hand, I really like simplicity. So I'm very much annoyed if things don't need to be so complicated if there are easier solutions. And propulsion in general is a complex topic and it can be much easier to use. And also the whole satellite mobility aspect and in space mobility aspect is way too much complicated still. It has of course, it's a heritage reason.

Space comes out of an agency based environment and is only at the brink of being a commercial big industry. And I think we really need to tackle the important aspects of it and really focus on the big problems that are still ahead. And yeah, there's also a sustainability aspect to it that drives me and made me with our four other co-founders found the company. We don't want to end up in a situation where we screw up our environment in low of orbit. And yeah, then regret it in a few years that we cannot access space anymore with all the benefits, the services that we are already used to on ground and maybe also limiting our space exploration ambitions. Morpheus was started in Germany but you've also been expanding your footprint in the US. I guess walk me through what that US-EU relationship looks like, whether it's on the commercial side, whether it's on the government side and partnerships.

Just what that means in terms of navigating that as a startup company. Yeah, that's a good question. So we have our origin in Germany. So we are a spin out of a German university. But we decided very early on, I think in the first year, to expand to the US. That's quite a unique decision to make as a very young startup. But the reason for that is that we think that the issues you want to solve is really globally. And that comes with a lot of complexity, of course, in the business.

But we are not afraid of complexity. We really want to solve and find easy solutions for that. The environments are quite different from the government perspective and also from the commercial perspective. But there's also a lot of commonalities. And so we pretty early shifted our headquarters to the US. It was in 2019 already. And because of the commercial part, but also for investment reasons. And because also the biggest part of the global market is in the US and will, I think, also be for the foreseeable future. And also from the mindset perspective. So Europe used to be maybe a decade behind the US in many regards. And it was very difficult in Europe to start a space company back then.

And yeah, we saw bigger chances to enable our big vision in the US. We talked about it a little bit at the beginning of the interview, but the fact that there's something like 9,000 satellites in orbit right now, space is getting busy and busier. When you think about, I guess, the emerging ecosystem and market

for the hardware and services that you are providing, where do you see the biggest demand signals coming from? Is it from some of these commercial players with their mega constellations? Or is it, for example, on the government side or in a world where geopolitically we know space is a warfighting domain and we have conflicts erupting in different parts of the world and satellite infrastructure is one of the first things that gets targeted. Yes, I think there is demand on both sides, on the commercial and the government side.

We started the company with the first pure focus on the commercial side because of one reason. We wanted to develop competitive products that are easy to use with great customer experience. And if you start out, or at least that's our belief, with the government aspect because we now have products on the market that we can tailor then also for government needs. We have unique advantages and capabilities that we can provide to allied nations, to the US and especially, I would say, in the NATO and European ecosystem. And propulsion and in-space mobility is a key enabler for our capabilities to ensure a safe world.

And you mentioned the geopolitical conflicts that are already present and that might increase over time. So we need to be ahead of any threat and to maybe give you some examples our propulsion system go to that has a lot of capabilities inherited implemented in the design so we are using a metallic propellant. It's a solid block of metal if you don't use it. And you launch it so it's very easy to get into space. And then you can turn it on whenever you need. You have no leakages.

Maybe you certainly heard about some missions, the astrobotic mission that didn't work out as planned because of a wealth failure. So we don't have any moving parts in our propulsion system. It's completely electronically controlled with high redundancy. And so it has a lot of safety built in the design and is easily adaptable to any spacecraft design because it has also a modular design and we can address a wide variety of satellite sizes and and also designs and shapes

and on the operation side with journey we are providing new capabilities to to really tailor the operation of constellations and make them more dynamic um on the on the execution part and as you can imagine um conflicts are typically coming up on short term so you need to react and observe maybe other parts of the globe with short notice. And so you need more dynamic space operations to adjust your constellation setup, your assets in space to really understand what happens here on ground. That does it for this episode of Manifest Space. Make sure you never miss a launch by following us wherever you get your podcasts and by watching our coverage on Closing Bell Overtime.

I'm Morgan Brennan.