CubeSpace’s Journey to Becoming the Intel of Satellite Control Systems

CubeSpace, a South African NewSpace company, is making waves with its ambitious goal to revolutionise satellite control systems. Founded just over a decade ago, the company has grown from a bootstrapped startup to a global player in the satellite industry, with its Attitude Determination and Control Systems (ADCS) now deployed in over 300 satellites worldwide.

A team of visionaries leads this emerging success, steering the company through impressive year-on-year growth for the past five years. With a recent venture capital injection of ZAR 47 million (USD 2.4 million) and a strategic acquisition of Dawn Dusk, a satellite simulation software company, CubeSpace is poised for even greater heights.

In this exclusive interview with Space in Africa, Mike-Alec Kearney, the CEO of CubeSpace, opened up about CubeSpace’s journey, exploring its recent successes, plans, and challenges of operating in the competitive space technology sector. From expanding into the microsatellite market to plans for setting up international subsidiaries, CubeSpace’s story is one of innovation, strategic growth, and a commitment to making space technology more accessible and reliable.

How has the first half of 2024 been for CubeSpace in terms of top-line growth, demand, team expansion, product launches, and geographic expansion?

The first half of 2024 has been solid for CubeSpace. We set an ambitious target of 70% revenue growth compared to the previous financial year. With our fiscal year ending in February, we’re at the halfway point, and I’m confident that we’re on track to achieve this goal. In addition, we’ve maintained this year-on-year growth for five consecutive years.

The increasing demand for our integrated ADCS is a key driver of our success. While some competitors have diversified into full satellites or other products, we’ve focused on refining our ADCS. This dedication has paid off, as our system has consistently demonstrated high pointing accuracy across various missions. After a decade of development, the system has reached a high level of maturity and is now deployed in over 300 satellites. We’re particularly proud that our ADCS offers a more cost-effective solution than many alternatives, leading to a significant increase in customers choosing our system for integrated solutions and standalone components like reaction wheels and sun sensors.

We’ve also made strategic inroads into the microsatellite market, a previously untapped segment for us. We recently secured our first contracts for satellites in the 450-kilogramme range and obtained contracts for ten additional microsatellites. In response to this market opportunity, we’ve designed a new reaction wheel specifically for microsatellites, incorporating state-of-the-art bearings and lubrication technology for extended operational life. We’re scheduled to begin delivering these new components later this year.

Regarding team expansion, we’ve taken a measured approach to growth. Our strategy has always emphasised efficiency, particularly given our origins as a bootstrapped company in Africa with limited initial funding. This approach has led us to focus on maintaining low costs and sustainable growth. As a result, while our revenue has been growing at approximately 70%, our team size has only increased by about 10-20%, with our current headcount at around 60 employees.

Geographically, we’ve always maintained an international customer base and are expanding our global footprint further. We’re in the process of establishing subsidiaries in Europe and the United States. Initially, these offices will concentrate on sales and support functions, allowing us to be more proximate to our customers and provide more efficient service. In the long term, we also plan to explore strategic opportunities for local development in these regions.

How does your customer base break down geographically, and what’s the mix between government, commercial, and other sectors?

Regarding geography, the bulk of our business – about 80% of our revenue – comes from the US and EU. It’s evenly split between these two regions, each contributing a similar share to our bottom line. As for the types of customers we serve, it’s quite a diverse mix. Universities are a significant segment for us, accounting for roughly 20% of our revenue. They’re doing some fascinating work with our systems. The lion’s share of our remaining revenue comes from two main groups. First, we have constellation satellite builders – companies working on large-scale satellite networks. Then, we have various research institutes. We’re particularly proud to count organisations like NASA in the US and the Mohammed Bin Rashid Space Centre in the UAE among our clients.

How does CubeSpace maintain such high quality and reliability, with over 3,000 components delivered to over 200 customers globally?

Quality is at the heart of everything we do at CubeSpace. We’ve put much effort into ensuring our products meet the highest standards. All our technicians and technologists undergo rigorous IPC (Institute for Printed Circuits) training. This covers soldering, harness making, assembly, and quality inspection. It’s not just a box-ticking exercise for us – this training is crucial in maintaining top-notch standards throughout our manufacturing process.

We’re also very demanding when it comes to our suppliers. We have a detailed set of quality standards they must meet, and we’re continuously checking to ensure their processes and outputs are up to our expectations. We partner with specialists for precise work, like soldering and component assembly. These suppliers often work with consumer electronics and automotive companies, so they’re used to handling huge volumes – we’re talking hundreds of thousands of components yearly. Their expertise and well-honed operations ensure we get consistently high-quality components.

Also, we’ve found that leveraging these experts is more effective than doing everything in-house. It allows us to tap into their advanced processes and years of experience, which would be challenging and costly to replicate ourselves. That said, we don’t just rely on our suppliers. We have stringent quality control measures in place. If we suspect a component isn’t up to scratch, we immediately quarantine and reject it. We’re not afraid to scrap components or take on extra costs if it means our final products meet our high standards. It might seem wasteful, but we see it as an investment in maintaining our customers’ trust and satisfaction.

CubeSpace recently announced the acquisition of Dawn Dusk. What strategic advantages does this acquisition bring to the company?

We are fascinated by Dawn Dusk’s acquisition. Despite being a relatively young company, Dawn Dusk has developed some incredibly sophisticated software and technology. They’ve also built up quite a customer base—we’re talking dozens, possibly even close to a hundred clients using their simulation software. We’ve been working with Dawn Dusk for quite a while, integrating their software into some of our products. As our collaboration deepened, it became clear that we could achieve so much more than we could separately by joining forces. It’s been great to see how well our visions align—their CEO and I are on the same page, making the acquisition process remarkably smooth.

One of our big focuses with this integration is to advance Dawn Dusk’s development plans. We aim to create a comprehensive simulator that can handle satellites of all sizes. This is huge for us—it puts us right up with other major players. We are working on improved features such as advanced mission planning and operations capabilities. Users can analyse power generation and consumption, monitor battery voltage, run link budgets, and carry out ADCS planning and simulations. We’re also adding pointing performance simulations and constellation planning features.

Bringing Dawn Dusk into the CubeSpace means significantly expanding our software capabilities. We’re not just acquiring their technology; we’re getting their talented team on board, which will accelerate the development of their software and allow us to integrate it more deeply with our existing offerings.

But here’s where it gets really exciting for our customers. This acquisition allows us to offer a much more comprehensive control system solution. Let me break down what this means:

• First, our customers can accurately simulate their satellite operations on the ground, greatly reducing risk.
• Second, they can thoroughly test and validate their systems before launch. Think of it as a dress rehearsal for space operations.
• And third, we can now offer full hardware-in-the-loop simulation. This means customers can connect our actual hardware to the simulator, allowing them to fine-tune the interface between their onboard computer and our ADCS system.

All of this adds up to a game-changing capability for our clients. They can now simulate the entire commissioning process, train their teams more effectively, and ensure all systems respond correctly before the satellite leaves the ground. It’s all about minimising risk and maximising confidence in our products’ performance in orbit. Of course, throughout this, we’re maintaining our commitment to quality.

How will this integration impact CubeSpace’s daily operations and structure? And what about Dawn Dusk – will it remain a separate entity or become fully part of CubeSpace?

We’re going for a full integration. The Dawn Dusk team is becoming part of the CubeSpace family. That doesn’t mean the Dawn Dusk brand is disappearing — their products will still exist under that name. But their technology? That’s going to be woven right into our CubeSpace software suite. We’re taking the best of both worlds and creating something even better. The Dawn Dusk team isn’t just coming along for the ride – they will be key players. They’ll continue supporting their existing products and lend their expertise to further develop our CubeSpace systems. It’s a win-win situation. As for leadership, Dawn Dusk’s CEO and founder is joining our software and ADCS teams. They’ve already worked closely with us, which is a natural progression. They’ll continue to be a driving force in our software development.

How do you plan to allocate the ZAR 47 million in venture capital funding you’ve received?

First off, we’re investing in our new range of reaction wheels. We designed our proprietary new motor at the heart of these wheels. We are scaling our range to service satellites of up to one ton. It’s a big step for us, and we aim to launch these in the first half of next year. But it’s not just about new products. We’re also investing a lot of money in optimising our production process. It’s all part of our strategy to scale up production and meet the growing demand from our customers. We’ve identified some bottlenecks in our current setup, and we’re tackling those head-on. We’re streamlining our production, boosting efficiency, and ensuring we can produce components in the volumes our customers need. Ultimately, we are building towards having stock on the shelf. 

Another key area we’re focusing on is improving how our products integrate into satellite systems. We’re seeing urgent needs in areas like satellite constellation projects, and we want to make sure our components fit seamlessly into these complex systems. This also means enhancing our testing and simulation capabilities – we’re talking about in-orbit simulations and hardware testing that will make our products even more reliable.

Now, I’d be remiss if I didn’t mention the challenges we’re facing, particularly with global supply chains. The COVID-19 pandemic threw a wrench in the works for many industries, and the space industry was no exception. We’re actively working to de-risk our manufacturing processes and build more resilience into our supply chain to ensure we are robust against global disruption. 

What are CubeSpace’s long-term goals for the next 5 to 10 years?

In a nutshell, we’re aiming big – we want CubeSpace to become the global standard for satellite control systems. Do you know how, when you think of computer processors, names like Intel or AMD immediately come to mind? We aim for that with our Attitude Determination and Control Systems (ADCS). We want CubeSpace ADCS to be the first thing that pops into someone’s head when thinking about satellite control systems, regardless of the satellite’s size. Whether a tiny CubeSat or a larger microsat, we want CubeSpace ADCS to be the obvious choice.

To make this happen, we’re focusing on three main areas. First, we’re expanding our product range. We’re developing reaction wheels and related components in all the sizes and types needed for satellites of any scale. We’ve already launched a new product line to address this. Secondly, we’re working on creating an incredibly efficient production system. The goal here is to scale up quickly to meet large orders. We want stock ready to go to offer our customers quick delivery times. Time is often of the essence in this industry, so delivering quickly can be a huge advantage.

Lastly, and this is crucial, we’re committed to maintaining competitive pricing. We’ve strategically decided to price our products lower than our competitors. It might seem counterintuitive, but it’s the right move as the industry matures. We expect the number of satellites being built to increase significantly, and when that happens, we think prices will stabilise. By positioning ourselves at a lower price point now, we’re setting ourselves up to be highly competitive in the long run.

I often wonder whether Africa will reach a point where government and commercial entities actively engage with and purchase products from African satellite manufacturers. 

That’s a question I’ve been pondering a lot lately. Most African manufacturers, including us, find their main markets outside the continent. But I’m starting to see signs that this might be changing. Take our own experience, for instance. We’ve already placed some of our ADCS systems on CubeSats from various African countries. It’s encouraging to see more and more African nations developing their satellites. Some buy directly from us, while others purchase from prime contractors who use our ADCS technology. So, in a way, we’re already making inroads into the African market, directly and indirectly. It’s a promising start, and it suggests there could be a real future for local demand in Africa’s space industry.

But here’s what gets me: many African countries have substantial budgets for space programmes. I’ve been to conferences where the figures being discussed are frankly astonishing. Yet, there’s still this tendency to buy satellites from international sources rather than investing in local manufacturing and building local capacity. These funds could be used more effectively if they were directed towards building local capabilities and sourcing from within the continent rather than always looking to China, the EU, or elsewhere. The irony is that Africa already has a solid foundation of companies producing various satellite components. You could source almost all the parts needed for satellite assembly on the continent. We even have African firms that manufacture entire satellites. So, we have the key ingredients: funding, infrastructure, and growing expertise. What we’re missing is the effective allocation of these resources.

Imagine if African countries started collaborating more, sharing resources, and using their budgets more strategically. The potential for efficiency and success would be enormous. Now, I don’t want to paint too rosy a picture. Currently, collaboration between countries is limited, and local satellite spending isn’t as optimised as possible. But I’m optimistic. I’m seeing a growing awareness among space agency leaders about the need for better efficiency. The potential exists, but we need visionary leaders who can turn good intentions into real action and progress. To be fair, many leaders are saying the right things. But is that translating into actual progress on the ground? That’s been slower. We need to reform the structure of local space industries, improve decision-making processes, and strengthen accountability measures.

I’m not a politician, and I don’t know how these changes will happen. But I firmly believe it’s possible. The potential for Africa in the space industry is tremendous. We could see a real African space renaissance with the right leadership and strategy. It’s an exciting prospect, don’t you think?