Atomos - Splitting the atom to connect the planets

Hi everyone, I'm really excited to talk to you about our company. Thanks, Jonathan, for the invitation and, and the great preface there. So we are a space company that's really focused on enabling deep space and opening up the frontier for future exploration and also lowering some of the barriers to entry for companies wanting to enter the space sector. So space, as well as being pretty inspirational, drives a lot of our economy today. So as many of you may know, our navigation systems, weather prediction, climate change science, telecommunications, broadband internet, so many things are actually enabled by space and the satellites that we put there. So it's actually a big part of our economy today, numbering in the hundreds of billions of dollars in size. So I personally have worked on a few large space programs for industry and agencies, and there is sort of an acknowledged gap in how we operate in space today. So essentially, rockets, the only transportation infrastructure we have for this industry, are okay at getting into space, but they are not okay for moving beyond lower orbits. Rockets are really optimized to get out of the gravity well that is Earth. But they're not that efficient at moving around once we're in space. So a satellite could be lost, is difficult to recover, and also the entire process is more expensive and cumbersome than it needs to be. So if there is actually a far more efficient infrastructure that we can be using, we can break it into two segments and optimize each segment based on the physics that governs it. So rockets are great for getting into space, but when we want to move around in space, we should use a different mechanism. Such as a space tug. Space tugs have been proposed since the 1950s and '60s by NASA. And what makes them so efficient and optimal is they can do multiple transfers. So if rockets can get satellites and payloads to low orbits, space tugs can move them to their final destination. This also enables a lot more versatility and opens up the market. So firstly, it benefits satellite operators. So a satellite operator that is launched to a low orbit and then transferred to a final orbit has, um, would experience cost savings of 20 to 40% on typical launch costs. So average launch costs are around $100 million today. But this model doesn't just benefit the satellite operators, it benefits the launch providers too. So launch providers will be able to tap new markets and will be able to reach space and new orbits from more diverse launch sites. So leveling the playing field and promoting competition in the industry. So, this is a good thing for all of us space data users here on Earth, and not just NASA and the space agencies. So, one analogy that I like to use for Coloradans is that if we lower the barrier to entry for space, we can have widespread broadband internet, which is fantastic for us on the ski fields and stuck on, on the jammed freeways around our state. Finally, it does benefit, um, space explorers. So not just NASA and other agencies, but then SpaceX and Blue Origin as well. So our model works synergistically with their launch vehicles, enabling them to reach their target destinations, be it the Moon or Mars or the asteroid belt, for a much lower cost at greater efficiencies. So our co-founding team has a very diverse background. So I have an aerospace engineering background with several years of research in this particular field. The last job that I had before leaving to create this company was executing a multi-hundred million dollar contract at Lockheed. So we do have William and Brandon who bring in business analytics, finance, and entrepreneurship in their backgrounds. So our initial market is targeting a market that exists today, geostationary Earth orbit. So this orbit typically costs $111 million for satellite operators to reach today. With our model, they'll be able to launch to a low orbit, such as low Earth orbit, for approximately $45 million, and we will complete the transfer for them for a contract fee, leading to up to 40% cost savings on the launch. So we do have an initial development period, but after which we do have revenue in the hundreds of millions. So we did just graduate from the Fanner Institute in January of this year. We have started our seed raise and have firm commits. Current raise is $1 million, and this is for filing our patents, securing long-lead contracts with customers, and also with government agencies such as the Department of Energy and NASA. Everyone, thanks for your attention. So, Atomos Nuclear and Space. So, we are splitting the atom to connect the planets.

All right, great job. Great job, Vanessa. So, okay, so let's see here. Everybody, if you do have questions, please don't be shy, put them into the chat. Christine, I'll open the floor to you first if you have any feedback or questions for Vanessa.

Yeah, absolutely. And I just wanna make sure you hear me since I heard I was a little echoey, so I put some headphones on.

Great.

So, so I think the first question is, and, and I think for a typical Silicon Valley investor, this would, this would be very common, which is you're raising a seed round of $1 million. It sounds, you know, much like pharmaceuticals or companies in health tech. There's a lot to get done. You don't really get product into market with that seed round. You don't even necessarily get a beta product up with that seed round. So, so how much capital is it going to take before You know that what you're building works. And how many years is that? You know, how much is that million dollars going to give you enough time to get the evidence required to get those long lead contracts that you talked about? And I imagine that that is what would get you the next round of capital to demonstrate that there's, you know, customer appetite.

Yeah, absolutely.

Can you sort of talk through that funding strategy? Because I think that actually might be your biggest problem.

Okay. Okay. So I'm going to break the question down into 3 parts. So firstly, we're talking technical risk. Next, we're talking, I guess, our cadence at which we can demonstrate at the technology. And then the third part is getting the customer contracts and what's required for that. So the first part of it, the technical risk. So we have identified some of the high-risk items, but our system is really designed to rely on heritage technologies that are either available commercially off the shelf have been developed for decades by NASA. So essentially, we are taking heritage designs but applying some new material technologies to them. So to prove out these new materials in a heritage system is actually very, very low effort. So we can do a lot of the, I guess, most risky technology development within a 12-month period, with essentially all of our, all of our key technical risks completed within a 24-month period. So we do aim to have those key risks completed before our seed raise and our Series A raise in 12 months' time. So that's the technical risk part. The funding need to do all of that technical risk burn down. So we actually are looking at non-dilutive funding as well as dilutive funding. So the $1 million raise will be able to do that for the first 12 months with the second 12 months completed under government contract. So a lot of the tech work that we want to do is strongly aligned with DARPA, DOE, and NASA technology roadmaps. So we're looking to cost share with them. So really, the $1 million seed really gets us to the point where we can partner with these agencies. Final point that I'd like to say is the total timeline until we have a product in space. So the man-hours required to do this, if we had full facility usage and so on, would only be around 2 years to launch a demonstrator and then 3.5 years to launch the final product. But as you pointed out, It's sort of analogous to the pharmaceuticals industry. So we're expecting the certification licensing process starting immediately to take 4 years from now. So we are conservatively predicting that we'll be able to launch our fully operational vehicle with and serve paying commercial customers in 6 years' time.

And do you need to have any of the technical risk removed before you can go out and start doing those customer sales, or can you get to work on that right away?

So we can get to work on that right away. So the contract structure that we're using is take or pay. So essentially they will be obligated to use our service if we hit certain milestones. So there is, so it, in this early stage, it's really helping us validate our customer segment and the market and demonstrate the market size to our investors while also enabling our customers to sign those contracts with us while we're perceived as high risk. But they will be upgraded and changed in our Series A as we burn down those risks. Right.

And what else needs to happen in the market for you to be successful? So do you require that the US government wants to fund a lot of space exploration, or are you okay if only the private market addresses it? If Elon, if Elon gets hit by a bus, are you still in business? Like what, what else needs to happen for your success?

So our model is complete, is based on a lot of factors. So the financial model that you actually saw was us lowering our prices to work very well with SpaceX. So essentially we enable every other launch provider to have a cost point that's the same as SpaceX's best prediction. So if SpaceX succeeds, that brings us more business. Inverse to that, if SpaceX, if they have an increase in their contract price or a drop in their cadence or more market capture, that also makes this a fantastic option for other launch providers to work in synergy with. Second part of your question, does anything need to happen in terms of the government? No, we really want to be a purely commercial entity. We do want to reduce the capitalization needs that we need through funds and dilutive funding by relying on government contracts, but that's not an enabler. That's really just a sweetener for us to make us a better deal for early-stage investors in particular. Got it.

Okay, I have a question from the audience here too. So Julie asks, can you elaborate more on the technological differences between what you're doing and what companies before you have tried to do here?

Yeah, absolutely. So essentially no one has looked at commercializing a space tug before. So NASA has a few programs, um, and DARPA has also looked into this in the past, but none of them have really flown. There are, um, 3 other companies pursuing space tugs, but we do use a different technology to them. So we are targeting future markets, so very heavy cargo transfer to the Moon and to Mars, and then the very heavy satellites that are going to GEO and are predicted to stay at a steady, constant market growth rate for the next decade. So to be able to target these heavier payloads, we need different technologies than these other startups that are looking at space tugs. So their systems use solar power. We are using nuclear. So I know that that is a taboo word, or I guess is a little daunting for people, but launching a reactor on a rocket to space has been done multiple times in the past, so tens and dozens of times. Um, and a reactor is completely safe until it's been operated. And so the radiation from a reactor is actually more benign than the space environment itself in a lot of cases. So this is, this is a fantastic system for space. It's like using nuclear in, in your submarines, you know, it doesn't operate in your backyard. It is a fantastic application for that technology rather than terrestrial power. So reactors have been developed by NASA over the past 4 decades. So we're essentially using some of their designs with new materials and fuel technologies that are inherently safe. So our IP portfolio and actually secret sauce is the fuel that we're using that is incredibly safe and optimized for space applications.

Okay. And is that, is that, um, you know, you'd mentioned the, the IP that you guys will be filing. Is that what it's related to?

Part of it, yes. So we, um, we are essentially creating an, uh, a patent thicket around in-space transportation systems. So we're looking at the reactor system and any associated systems. So the power management system, conversion system, thermal management, anything that's unique to our spacecraft, um, we are looking to patent, and it is all patentable material. There is some in the open domain that NASA has published, but of course they are more academic studies than our, our design specifications that we have developed with industry partners.

Okay, uh, Sarah asked the question as well: how do you dispose of the spent nuclear fuel?

Okay, that's a fantastic question. So our reactor can operate without being refueled for 15 years. Once it's approaching its end of lifetime, we have essentially two options. So the first option is to put it into a graveyard orbit. So these are designated orbits around the Earth that really don't interfere with any of the satellites that are there and have a very, very low probability of ever being on a collision course. So there are already 30, um, uh, disposed of reactors in this orbit, all of them from the Russian space program and one of them from NASA. Um, they launched a vehicle in the 1960s. So we'd, um, our reactor, essentially, um, the radiation decays down over a period of a couple of decades, after which it's a completely benign piece of space debris. So that's one option, um, which we don't feel is very responsible, even though it is what is, um, the— what, what we're obligated to do in terms of international regulations. What we would like to do is insert ourselves into a heliocentric orbit, and which is an orbit far away from the Earth where we won't interfere. So think, think about where Elon Musk's Tesla is flying. We're looking to put the reactor So like I said, the space radiation is more dangerous in a lot of cases than the reactor radiation itself, particularly after we've stopped operating it. So it's— there is no safety issue or risk concern concerning this. Definitely not any more danger than what SpaceX has done with the Tesla.

Sure. Okay. Well, that was great. Christine, do you have any closing thoughts or pieces of advice for Vanessa as she tries to do something very ambitious?

Yes. And I love how ambitious this is. So I think my first piece of advice is probably about, I want to say maybe 8 years ago, you know, sort of 7 to 10 years ago, there were a number of tiny satellite companies that got funded. And, and so what I would, number one, if you've not already done this, given the amount of capital you're raising, I would certainly go check out Crunchbase. I know you know the companies better than I do. See who funded them and reach out to those folks. So, um, to try to jumpstart. Yeah, go ahead.

I think it's probably value added if I say this. So we already have our Series A investors lined up if we hit our seed round milestones. So we are talking to all of those companies and we're actually establishing formal relationships with them so that they have rights of first refusal and also more obligations to join our Series A. But yeah, it's, it's, there are space investors out there and they're very committed to this project, just not in our seed round because we're a little bit early.

Yeah. And so, and so, and my second piece of advice is not to be very cautious about saying we already have our Series A investors committed because then every investor out there will say, well, why aren't they doing the seed? If they're not doing the seed, they're not really committed. They're just blowing smoke or kicking your tires. So you might want to think very carefully about how you frame that engagement and just to make sure you don't accidentally create an issue for yourself in terms of perception with the potential seed community.

Okay, sure.

So I think that's number 1. And then number 2 is from what you've described, you have a very close timeline on taking out that 12 months around technical risk with private funding. And then you've got another 12 months that you're anticipating based on non-dilutive funding, which is fantastic that you have access to. I think it would be prudent to have either a backup plan or, you know, something that you structure ahead of time for if that takes longer, if that sales cycle to get that non-dilutive funding takes a bit longer. I'm assuming your financial co-founder has, you know, that grant writing experience in his background. Hopefully someone does, because that is a gnarly problem. And Cause I have, you know, whether it's, you know, your own, your own development issues or just sort of market-based issues or who knows what, you know, Donald's going to do next month. Right. You don't need things getting in your way that you don't anticipate. So I always advise if, if you only need $1 million and I say only with air quotes, if you only need $1 million to go for 12 months, I would seriously consider, you know, bumping up with like a 30 to 50% margin of error on that. Just because when you're at those smaller dollar amounts, a lot of the seed institutional investors, you know, they don't have a big difference between writing you a $250K check and a $500K check. So you might as well take the $500K check, um, and, and have some, some security buffer for you because you just don't want to be out scrambling to get more private capital when you're also trying to get the other work done.

All right, thank you, Christine. Thank you, Vanessa.