Brokers and investors will tell you that its getting impossible to separate the wheat from the chaff in the technology start up space these days.
However, there are still a few time honoured tests that can be applied when running the ruler over a tech start up.
Do the vendors have technical credibility ?
Is the business scalable ?
Does the technology actually work ?
Is there a market demand for its services ?
ASX listed Burleson Energy, currently trading at just 0.4c (that’s just point four of one cent) appear to have landed a company maker that ticks all of those boxes with its impending back door listing of Sky and Space Global Ltd. (SSG)
SSG is a “nano-satellite” start up company run by three Israelis with resumes that look like they would be right at home on the HR Manager’s desk at NASA.
The CEO, Mr. Meir Moalem is a former Israeli jet fighter pilot no less who ended up leading the MEIDEX experiment on Space Shuttle Columbia as the project manager for Israel's first astronaut flight.
The CTO, Mr. Meidad Pariente is a former AMOS-1 Israeli communications satellite operator and Deputy Mission Manager for AMOS-2. He was the Chief Systems Engineer for the AMOS-3 satellite which successfully launched in 2008. Mr Pariente, a nano-satellite expert also led a team of Israeli engineers and scientists designing the VENUS project, a joint Israeli-French hyper spectral satellite.
Maya Glickman, the COO of SSG, was a Senior Satellite Engineer working on communications satellites with Israel Aerospace Industries. Ms Glickman was part of the AMOS-3 satellite development team and led the end-of-life mission team for the AMOS-1 satellite.
Importantly, both Mr Pariente and Ms Glickman were involved in the assembly, integration and testing of “Duchifat-1”, the first Israeli nano-satellite.
SSG is a start up company seeking to deploy clusters or “constellations” of “nano-satellites” into space for the purposes of providing a global telecommunications network for satellite phone and data users.
Nano-Satellites are the latest thing in satellite technology and are considerably lighter, cheaper to build, easier to launch and cheaper to service than traditional large satellites.
In the ten years of nano-satellite launches prior to 2014, only 75 units were launched. However as the commercial benefits of these miniature satellites started to become obvious, those launch rates increased significantly with 94 units launched in a three month period from November 2013 to January 2014 alone.
Whilst hardware in the nano-satellite business is obviously very important, of equal importance is the software required to allow each satellite to communicate with each other and the earth. With a lifetime of aerospace and satellite experience between the three SSG vendors, software development is the company's trump card.
SSG has developed unique software IP for Nano-Satellites and operating systems that will deploy, maintain orbit control and handle communication code between each of the nano-satellites to give a global coverage
The company plans to create its own global satellite telecommunications network that is capable of providing affordable phone, data and messaging services to some of the 4 billion people in the world that don’t currently have access to mobile telecommunications.
They also intend to target the commercial shipping and airline industries potentially making that call to Aunty Beryl from 35 000 feet whilst winging it to Los Angeles an affordable and technically feasible task.
Telcos that provide existing very expensive satellite tele-communications will also be targeted as wholesale customers.
The company estimates the global satellite narrow-band communications market to be worth around $5 billion annually and up to $10 billion by 2021.
This week SSG signed a heads of agreement with a nano-satellite manufacturer to produce its first three pilot units.
The company has committed to the ambitious task of launching all three units within 18 months as a proof of concept pilot with the ultimate goal being to launch “constellations” of up to 200 units to create a truly global telco network with super affordable rates.
The big question mark attached to such high-tech businesses is always around “does the technology work” ?
Interestingly however the SSG vendors have already built and launched a nano-satellite on behalf of the Herzliya Science Center which is still operational 18 months after being launched, providing a unique level of comfort for investors.
SSG also say they have already received significant interest from parties that are interested in securing band width when their first commercial constellation is launched.
The satellite sector is super hot but has traditionally been dominated by the majors such as Google for instance who bought SkyBox for $500m or One Web who are estimated to have already invested $2b into their 650 strong network of satellites.
Another good example is Space-X who have already invested $10b in their satellite network.
The advent of nano-satellite’s which are far cheaper to build, launch and operate have busted the boys club apart and left the door wide open for smaller companies with an abundance of IP and smarts to become globally recognized telco network owners within just a short space of time.
Sky and Space Global Ltd, who will shortly raise $4m to backdoor list into ASX listed Burleson Energy, is certainly one such company and at just 0.4c a share, maybe, just maybe, this one could represent that elusive ten bagger investors are constantly scouring the landscape for.
