Elon Musk’s SpaceX is acquiring small-satellite data provider Swarm Technologies to expand the team and possibly the technological capabilities of its growing Starlink internet service.
It is a rare move as SpaceX typically manufactures its rocket and satellite hardware in-house or hires subcontractors. Once the acquisition is complete, SpaceX will accommodate Swarm’s roughly 30 employees and its network of 120 tiny satellites.
In an August 6th filing by Swarm with the Federal Communications Commission that requested approval to shift ownership of its satellite and antenna licenses to SpaceX, the acquisition came to the fore. Swarm has 120 tiny SpaceBEE satellites in orbit and it reached an agreement on July 16 to merge with SpaceX.
“Swarm’s services will benefit from the better capitalization and access to resources available to SpaceX, as well as the synergies associated with acquisition by a provider of satellite design, manufacture, and launch services,” the filing said.
Swarm to compliment Musk’s Starlink satellite internet service
On February 8, 2021, SpaceX started accepting pre-orders for its Starlink satellite internet service. This allowed public members to enter their home address and put down $99 for an antenna-router bundle that Starlink would ship on a first-come, first-served basis depending on location.
The next day Elon Musk tweeted, “SpaceX needs to pass through a deep chasm of negative cash flow over the next year or so to make Starlink financially viable. Every new satellite constellation in history has gone bankrupt. We hope to be the first that does not.”
Acquisition of Swarm is seen as a business maneuver by Musk as he extends the venture into the world of consumer electronics and desires to keep afloat while caught in the chasm of negative cash flow with a hope to turn the network profitable fund Musk’s massive Starship launch system.
However, Swarm’s constellation and Starlink operate in different frequency bands, the revenue generation path from the Swarm constellation is not clear for SpaceX aside from gaining staff expertise.
Meanwhile, experts in the field believe that SpaceX benefits from access to the intellectual property and expertise developed by the Swarm team.