The combination of Hispasat and SkyPerfect JSAT as strategic investors could be “a marriage made in heaven” for LeoSat, Chief Executive Officer (CEO) Mark Rigolle said during an exclusive talk with Via Satellite about the July 10 announcement of the Spanish operator becoming a second major strategic investor in the Low-Earth Orbit (LEO) operator. Rigolle described the significance of the deal as “pretty enormous” for the company.
“Hispasat have been very supportive since the get-go,” said Rigolle. “It is a partnership of equals — which is good. Hispasat have invested the same as SkyPerfect JSAT. They have bought the same equity instrument and they have the same rights as SkyPerfect JSAT. The willingness of Hispasat is to continue that into Series A funding and further series into the future. They want to jointly be the strategic anchor investors in this company.”
Rigolle hinted that Hispasat could be a more active investor, directly involved with key elements of LeoSat. “I want to emphasize that this money is not just to keep the lights on and pay salaries,” he said. “Hispasat have asked us to look at regulatory and ground equipment. They want to have another look at our constellation system satellite [developed by Thales Alenia Space]. It is fully designed and specified, but they want to take a look.”
The collaboration and natural synergy between the two investors will auger well for LeoSat’s future, said Rigolle. “SkyPerfect JSAT was ecstatic to have Hispasat. I deduct they have worked together in the past. They seem to like and respect each other, which is good,” he said. “I have been at a certain satellite start-up that will remain unnamed where there were certain different points of view among shareholders. Board meetings could be less than serene. Things don’t always have to be chummy but they do have to be civil. I am quite sure we will achieve that with SkyPerfect JSAT and Hispasat.”
Rigolle had a colorful career working with the likes of SES and O3b (now SES Networks), and is bringing that range of experience — from start-up to established operators — to the table in order to make LeoSat a success. “There are two ways to fund a start up,” he said. “You can grab anybody’s money that is willing to wave a check at you and then figure it out later. Or, you can have a funding strategy, where you say these types of possible investors are the ones you need to go after and then go after the best ones in terms of compatibility. That where we have landed with LeoSat. If someone had told me two years ago that it would take two years, I would say that was too long. But, it took a long time. We now have the combination of strategic investors that is second to none in terms of quality and compatibility, alignment of views, and what they want to do with the company going forward. Their top management has had meetings with JSAT’s top management. The starting point is very sound and very healthy.”
The SkyPerfect JSAT and Hispasat funding deal means it is unlikely that another satellite operator will come in and be another strategic investor in LeoSat. “I think from a satellite operator perspective, three might be a bit of a crowd, although I could see certain combinations,” said Rigolle. “I think this could be a marriage made in heaven. SkyPerfect JSAT and Hispasat have no overlapping beams or capacity, no overlapping markets at all. This means there is no animosity, or negativity. There is no overlap. They are totally complementary in terms of coverage and markets.”
LeoSat did talk to a number of operators who could have been potential LeoSat investors. During the discussions, Rigolle said he noticed that operators were going through a period of existential angst. “They are on the couch talking about their problems,” he said. “There were two types of reactions we encountered during these talks. One was their board said ‘No, we can’t look at this, we need to retrench, and fix the factory strategy before we do anything else.’ Then, there are other boards who said that if our existing business is not growing or going down the drain, then they would need to see if we can apply our skills somewhere else or another pillar under our existing business to sure up the temple.”
Moving forward, LeoSat will be working together with both SkyPerfect JSAT and Hispasat to make sure their ambitious plans pay off. Rigolle is extremely confident in the future, despite some doubts in the market that it will succeed in a competitive constellation race. “I sometimes get the impression that people think we have been sitting here twiddling our thumbs waiting for $100 million to come in. I want to set the record straight. We have been deploying our resources, Thales resources, JSAT’s resources over the last 12 months to achieve a lot of progress, including selling,” he said. “We have just passed the $1 billion mark in total contracts. Most of them are soft commitments. Having $1 billion in soft commitment pre-launch ain’t that bad.”
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