Xona Space Systems raises $250M and launches 6 satellites to deploy the world's first commercial GPS alternative

Speaker 1: Our next guest will be joining in just a second with Brian Manning, Uzona Space Systems returning to the show, I believe, is here in Here we go. The waiting room. So let's bring Brian in to TV Panels. Brian, how are doing?

Speaker 5: Hey. It's up, guys. Good to be back. Welcome back Good to see you again. Congratulations

Speaker 1: on the progress. Great setup. Great setup today. What has changed since the last time we talked? It was maybe six months ago, five months ago. What's what's new in your world?

Speaker 5: Yeah. A whole lot of things. I think I was sitting a little further over last time on a stool, but it was a pretty empty warehouse

Speaker 1: still. Now he's got a chair.

Speaker 5: Yeah, right? That's sitting there's a little out of screen, but there's an actual satellite sitting over here. The next one that we built. We actually launched six satellites earlier this week to start actually deploying our, you know, the world's first commercial satellite navigation service. You know, really built to, you know, bring GPS into the, you know, modern technology era effectively and announced this morning a 250,000,000 funding round at a 2,450,000,000

Speaker 1: evaluation. Thank you. That's

Speaker 5: what was waiting for. So... Yeah. A lot of things moving in groove in here.

Speaker 1: Amazing. Deep SpaceX lineage with, your personal experience and Steve Jervisin, SpaceX board member, leading the round. What, what what can you tell me about how you're co designing your satellites to work with the SpaceX product portfolio. I was not aware that, Starlink satellites sometimes go on specific rockets that are designed just for those. It's not all just free gap capacity. There's there's a lot of co design that happens there where the capabilities of the rocket are designed alongside the capabilities of the satellite. What what have you, designed around? What have you leaned into? What are you expecting to come down the pipe to unlock new capability? How does that back and forth work these days?

Speaker 5: For sure. Yeah. So the the satellites we just launched went up on a Falcon rocket, so they went up with SpaceX. Yeah. But as we're growing... And part of the reason we have the factory here is that, you know, we're growing from the point where we're launching satellites as a rideshare, where we only want like a small fraction of the rocket Yeah. To the point where we're launching enough satellites to grow from, you know, up to the full two fifty that we actually want the entire rocket. Got it. And so one of the things though that we're doing is making sure that we're designing it that it can go on any rocket that's out there. Oh. And I think SpaceX in many ways really set the standard with like the five meter fairing. Got it. But that's been the standard size for most rockets around the world. We are looking forward to the Starship future also and how to make sure that we are future proofing ourselves to make sure that we can fly on Starship as it becomes ready for commercial companies. So with that standard five meter fairing, what are the trade offs that you're making to fill that efficiently,

Speaker 1: get the most performance out of your satellites? Is there a sweet spot number of satellites that you wanna fit into a full ride when you're at that stage? Like, what are the trade offs that you're making?

Speaker 5: Alright. The sweet spot is cram as money in there as possible. It's like you're you're paying for the whole rocket. You're still using it. Yeah. I I was I was a hockey player, so I remember the statement of like, you paid for the whole stick. You know, you gotta keep it on the ice and use the whole stick. There you go. It's kind of the same with the rockets that the rocket price doesn't go down if you only fill Yeah. Half of Yeah. So that's one of the things, you know, our our current generation satellites, you know, we can fit, you know, in the neighborhood of 30 into a rocket. Our second generation satellites that we're moving to as we go from kind of ride shareable to full rocket, where we can fit 50 to 60. Woah. And so that means you effectively cut your launch prices in half as we And go it is taking a lot of lessons from what SpaceX did with Starlink, how do you flatten satellites out and pack them in very efficiently to use up you know, every ounce of volume and mass that that thing can carry. So what does that mean on the manufacturing side? Because all of a sudden, it seems like if there's a particular

Speaker 1: ride that you're booked on, you got to make sure that all 50 are done by the time Yep. Launch happens. Do you have 50 manufacturing lines? Are you... Do you have a, like, assembly line for this or multiple multiple lines? Like, what what has scaling manufacturing looked like at the company?

Speaker 5: Yeah. So I'm actually sitting in the middle of the assembly line right now. We're we're we're starting to ramp up to a couple satellites a week. Okay. And as much as, like, you hear 50 satellites in in space, that sounds like a really big number. You know, I came out of the automotive world where, I mean, it's like, oh, does that... Do do we do that on the prototype line next week? Like, it's just... It's such tiny volumes. Yeah. And so a lot of things we've done here is taking lessons on how do we build satellites more like, you know, cars and what level of testing and very much following... You you kind of mentioned how do we mirror SpaceX. How do you follow the SpaceX algorithm? And step one is get rid of, you know, dumb requirements. Yeah. How do we make sure that we're not imposing unnecessary requirements on what we're doing to build these things as efficiently and, you know, cost effectively as we can. How do you think about network congestion?

Speaker 1: I was just I was just hearing about how Starlink is an amazing network, but there are some small pockets where if you have a whole bunch of people in one small Alaskan town, they will actually see some network congestion, and the terrestrial Internet providers have done decades of work to make sure that, like, a stadium still has cell cell connection when there's a 100,000 people at a football game. Does that... And is that is that a factor for you where you might see a lot of demand for these... For for for this this service in a particular area and you need to design around that, or is that less of a factor for this particular technology?

Speaker 5: It's a really good question. And one of the superpowers about GPS and similarly the way that our system operates is that it's not bidirectional. It's a one directional broadcast. Okay. And what that means is once you have coverage in an area, you can support an infinite number of users in that area. Interesting. So it's almost more like radio than it is like communications. Yeah. And so for us, like, once we get, you know, the critical number of satellites up to serve that area, you you can cram 10,000,000,000 people into that area and we can still support every single one of them. Mhmm.

Speaker 2: I remember... Talk about the kind of expanding need for systems like Pulsar on the Basics earnings call. Elon was making the bull case for Starlink as in, like, we're gonna have just way way way... Like, because of the explosion of robotics that I think we can bank on over the next ten plus years, there's just gonna be way more connected devices that that have a bunch of unique needs, some of which align with with, you know, humans just carrying devices, but there's a bunch of other use cases.

Speaker 5: Yeah. I I think the company is like... So we came out of the autonomous car world, and it was really built to support the world's transition from, you know, a hands on world to a hands off world. And if you look at, you know, what satellite communications are really doing for devices, they're answering, I would say, kind of the what and the why, but it's really leaving the where and the when. And so that's... Our system really fills the where and the when for things, it does it at an accuracy level that they need and the places that they need, and it's really filling the gaps for GPS struggles. And so GPS, as great of a system as it is, is a half century old architecture operated by the military, built for the military. And most people, like if you ask a random person on the street like, Hey, what is the value of space? A lot of people say, Well, GPS, that's the first thing that comes to mind. Yeah. But similarly, you see the, what I call the nuisances today, where if using a Strava app to go running and you go underneath trees and it's, I didn't run two miles, I actually ran two and a half. Yeah. Or the Uber is down the street and you can't, you know, catch it because it's it's just on the opposite side and you're running through the rain. There's those levels of nuisances, but it also is much bigger than that and what, like, the conflict in Ukraine has highlighted where, you know, GPS jamming is just kinda running wild Mhmm. Because it does disrupt all the military systems that are over there. We're seeing the same in Israel. We saw the same in Iran. Like Mhmm. And these are no longer just military problems that, you know, all the countries around there are getting disrupted. I mean, there's even been civilian airliners that have gotten shot down because of this. So it is a unfortunately expanding problem that we are really building a solution to primarily built for commercial, but we are proud of the work that we do with the military as well. On on military GPS, I I remember

Speaker 1: maybe, like, fifteen years ago or something when when Google Maps was was was becoming dominant. There was this thing that might have been fake news or rumor, but this idea that the civilian GPS system was less accurate than the military GPS system. And at a certain level of precision, that technology or that protocol was, like, encrypted or classified. I don't know if that's true or not, but are you going to face similar regulation where a certain, certain capability level of your technology will be restricted? Or are we in a new regime where kinda everyone can have centimeter level access to positioning because maybe it's not that big of a deal anymore. I don't know.

Speaker 5: Yeah. The answer is a bit of both. Okay. And so in... I think it was the nineteen nineties that they did. The US actually did degrade the accuracy. It was called selective availability. That's right. Yeah. And they turned it off for a second, I think, during, like, the Gulf War and everyone's like, wow. This is way better than we thought. Oh. But then there was a 747 that wandered into Russian airspace and got shot down and killed everybody on board. Woah. And so that was actually The US made the decision that, like, this is too important. Like, having reliable precision is too important to the world. We can't keep degrading it. And so they actually made it... I think Clinton made an executive order to... That they won't degrade it anymore.

Speaker 1: So when he comes monitor... The seven forty seven got off track because it didn't have the higher level of precision. Right. Interesting. And it it wandered into, like, That makes sense. GPS wasn't really being used and so it wandered into unfriendly airspace. And

Speaker 5: if you translate into the modern world, like the the same the same thing is happening effectively again, but it's it's not as much even around precision, it's about the protection and, you know, the jam a bit, like, how jammable GPS is. Sure. And, like, unfortunately, it was in... It was, I think, Christmas of twenty four. It was in Azerbaijan I remember. Airlines. Yep. Air... Like, and it it didn't... Like, the GPS was jammed. It couldn't find the runway, and it was doing circles and it wasn't broadcasting where it was because it didn't know where it was. Yep. And so... Got shut down. You know, it got shut down. And so, you know, if that was American Airlines flight, I think it would have caught a lot more news. Definitely. But, unfortunately, these these instances are becoming more real and, you know, aviation cuts a lot of attention, but, you know, it's happening to drones, it's happening to time synchronization, it's happening to buses, to logistics, to all these different things that just need a lot better precision, a lot better power and protection than they're able to get with, you know, the the kind of legacy systems that are out there. Interesting.

Speaker 1: I have one last question. Go for it. On the receiver side, what is the distribution model? I mean, I I can go buy a Starlink terminal at Best Buy. I can buy it online. Do you have a direct to consumer or partnership business business development relationships with everything from, a Garmin or an or an Apple or a Google that might make a device that would benefit from this? Or are you focused on, go to market with the military first or airlines? Like, what what is the what is the what is the plan for catching the data?

Speaker 5: Yeah. And I... You probably asked the most important question because satellites by themselves, unless you have something and actually pick up and use the signal, they're they're just making noise in space. Right? And they're they're kind of pointless. Yeah. And that's, you know, one of the the magic of Starlink is that you can go by just a terminal and that it is easy to to access. Similarly, you know, GPS, we made the strategic decision early on to not try and build our own chipsets. So there's there's 2,000,000,000 plus chips being sold every single year. They're integrated into every, you know, phone, train, ship, truck, watch, etcetera. And so that being said, that the US government kinda has built the biggest freemium opportunity in history. Sure. Where they got 7,000,000,000 users hooked on a free service and they never made an upgrade tier for it. Yep. One of the things that we cracked and what has really, I think, driven a lot of the excitement and and why a lot of customers are working with us is that we designed the entire signal and system around the user equipment. Got it. So we didn't start with a satellite and say, hey, OEMs, figure out how to use this. We started with user equipment and said, alright, how do we integrate our service and how do we design the entire network so that it is just a software update away? Software. And that it makes it that easy to integrate with everything. And we've we've demonstrated that on, you know, everything from the tiny little chips that go into dog collars to, you know, the big military receivers and aviation ones now. It's exciting to see them roll out. That is amazing strategy. I love it. Crazy. Any any power implications?

Speaker 1: If I turn this on, does my battery draw, you know, burn through quicker?

Speaker 5: Yep. So what we've actually seen is that it gets better. And so our our signal... So there is such a thing as free lunch. This is amazing. You gotta work hard. But then then the user gets a free lunch. Our our signal is so much stronger. It's just easier to pick up and a lot of the battery draw that comes with GPS is you're to pick up and find a signal that's a trillion times weaker than a WiFi signal. Yeah. Like it's phenomenal. You can even see the thing at all. That's amazing. But ours, like, we've demonstrated how much it can punch through jammers. We can even... We've done testing to show it can get indoors. So we're starting to break that indoor outdoor barrier. And a side effect of that is it it actually can reduce battery drain because it's just easier to pick up.

Speaker 1: That's amazing. Did we already hit the gong? We've hit the gong several times. I... I'm gonna hit it again. We do it, why not? There

Speaker 5: it is.

Speaker 1: Thank you so much for coming on the show. Crazy update. Thank you so much, guys. Really, really exciting stuff. Thank you so much for hopping on the show with us. This is team. Fantastic. We'll talk to you soon. Goodbye. Let