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SpaceX snags $885M from FCC to serve rural areas with Starlink

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The FCC has just published the results of its Rural Digital Opportunity Fund Phase I auction, which sounds rather stiff but involves distributing billions to broadband providers that bring solid internet connections to under-served rural areas “on the wrong side of the digital divide.” Included is $885 million earmarked for SpaceX, whose Starlink satellite service could be a game-changer for places where laying fiber isn’t an option.

Only three other companies garnered more funds: Charter with $1.22 billion; Minnesota and Iowa provider LTD Broadband with $1.32 billion; and utility collective Rural Electric Cooperate Consortium, with $1.1 billion. Those are all traditional wireline-based broadband, and a quick perusal of the list of grantees suggests no other satellite broadband provider made the cut (180 bidders were awarded support in total).

The $9.2 billion auction (though the specifics of the process itself are not relevant) essentially asks for bids on how much a company can provide service to a given area for, ideally with a 100 megabit downstream and 20 up. Local companies can collect the hundred grand necessary to fund a fiber line where there’s now copper, and big multi-state concerns may promise to undertake major development projects for hundreds of millions of dollars.

SpaceX’s Starlink has the advantage of not requiring any major construction projects to reach people out in the boonies. All that’s needed is a dish and for their home to be in the area currently covered by the rapidly expanding network of satellites in low-Earth orbit. That means the company can undercut many of its competitors — in theory anyway.

Starlink has not had any major rollout yet, only small test deployments, which, according to SpaceX, have gone extremely well. The first wave of beta testers for the service will be expected to pay $99 per month plus a one-time $500 installation fee, but what the cost of the commercial service would be is anyone’s guess (probably a bit lower).

In order to secure the $885 billion in the FCC’s auction, SpaceX would need to demonstrate that it can provide solid service to the areas it claims to for a reasonable price, so we can expect the costs to be in line with terrestrial broadband offerings. No other satellite broadband provider operates in that price range (Swarm offers IoT connection for $5/month, but that’s a totally different category).

The FCC doesn’t just knock on Elon Musk’s door with a big check, though. The company must demonstrate “periodic buildout requirements” at the locations it’s promised, at which point funds will be disbursed. This continues for a period of several years, and should help the fledgling internet provider stay alive while undergoing the rigors and uncertainties of launch. By the time the FCC cash dries up the company will ideally have several million subscribers propping it up.

This is “Phase I” of the auction, targeting the areas most in need of new internet service; Phase II will cover “partially-served” areas that perhaps have one good provider but no competition. Whether SpaceX will be able (or want) to make a push there is unclear, though the confidence with which the company has been approaching the market suggests it may make a limited play for these somewhat more hardened target markets.

The push for expanding rural broadband has been a particular focus for outgoing FCC Chairman Ajit Pai, who had this to say about its success so far:

We structured this innovative and groundbreaking auction to be technologically neutral and to prioritize bids for high-speed, low-latency offerings.  We aimed for maximum leverage of taxpayer dollars and for networks that would meet consumers’ increasing broadband needs, and the results show that our strategy worked. This auction was the single largest step ever taken to bridge the digital divide and is another key success for the Commission in its ongoing commitment to universal service. I thank our staff for working so hard and so long to get this auction done on time, particularly during the pandemic.

You can read the full list of auction winners at the FCC’s press release here.

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Will this time be any different for Twitter?

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As Twitter seems to buy its way into competing with Clubhouse and Substack, one wonders whether the beleaguered social media company is finally ready to move past its truly awful track record of seizing opportunities.

Twitter’s pace of product ambition has certainly seemed to speed in the past several months, conveniently following shareholder action to oust CEO Jack Dorsey last year. They’ve finally rolled out their Stories product Fleets, they’ve embraced audio both in the traditional feed and with their beta Spaces feature, and they’ve taken some much-publicized steps to reign in disinformation and content moderation woes (though there’s still plenty to be done there).

In the past few weeks, Twitter has also made some particularly interesting acquisitions. Today, it was announced that they were buying Revue, a newsletter management startup. Earlier this month, they bought Breaker, a podcasting service. Last month, they bought Squad, a social screen-sharing app.

It’s an aggressive turn that follows Twitter’s announcement that it will be shutting down Periscope, a live video app that was purchased and long-neglected by Twitter despite the fact that the company’s current product chief was its founder.

TikTok’s wild 2020 success in fully realizing the broader vision for Vine, which Twitter shut down in 2017, seems to be a particularly embarrassing stain on the company’s history; it’s also the most crystallized example of Twitter shooting itself in the foot as a result of not embracing risk. And while Twitter was ahead of that curve and simply didn’t make it happen, Substack and Clubhouse are two prime examples of competitors which Twitter could have prevented from reaching their current stature if it had just been more aggressive in recognizing adjacent social market opportunities and sprung into action.

It’s particularly hard to reckon in the shadow of Facebook’s ever-swelling isolation. Once the eager enemy of any social upstart, Facebook finds itself desperately complicated by global politics and antitrust woes in a way that may never strike it down, but have seemed to slow its maneuverability. A startup like Clubhouse may once seemed like a prime acquisition target, but it’s too complicated of a purchase for Facebook to even attempt in 2021, leaving Twitter a potential competitor that could scale to full size on its own.

Twitter is a much smaller company than Facebook is, though it’s still plenty big. As the company aims to move beyond the 2020 US election that ate up so much of its attention and expand its ambitions, one of its most pertinent challenges will be reinvigorating a product culture to recognize opportunities and take on rising competitors — though another challenge might be getting its competition to take it seriously in the first place.

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Sila Nanotechnologies raises $590M to fund battery materials factory

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Sila Nanotechnologies, a Silicon Valley battery materials company, has spent years developing technology designed to pack more energy into a cell at a lower cost — an end game that has helped it lock in partnerships with Amperex Technology Limited as well as automakers BMW and Daimler.

Now, Sila Nano, flush with a fresh injection of capital that has pushed its valuation to $3.3 billion, is ready to bring its technology to the masses.

The company, which was founded nearly a decade ago, said Tuesday it has raised $590 million in a Series F funding round led by Coatue with significant participation by funds and accounts advised by T. Rowe Price Associates, Inc. Existing investors 8VC, Bessemer Venture Partners, Canada Pension Plan Investment Board, and Sutter Hill Ventures also participated in the round.

Sila Nano plans to use the funds to hire another 100 people this year and begin to buildout a factory in North America capable of producing 100 gigawatt-hours of silicon-based anode material, which is used in batteries for the smartphone and automotive industries. While the company hasn’t revealed the location of the factory, it does have a timeline. Sila Nano said it plans to start production at the factory in 2024. Materials produced at the plant will be in electric vehicles by 2025, the company said.

“It took eight years and 35,000 iterations to create a new battery chemistry, but that was just step one,” Sila Nano CEO and co-founder Gene Berdichevsky said in a statement. “For any new technology to make an impact in the real-world, it has to scale, which will cost billions of dollars. We know from our experience building our production lines in Alameda that investing in our next plant today will keep us on track to be powering cars and hundreds of millions of consumer devices by 2025.”

The tech

A lithium-ion battery contains two electrodes. There’s an anode (negative) on one side and a cathode (positive) on the other. Typically, an electrolyte sits in the middle and acts as the courier, moving ions between the electrodes when charging and discharging. Graphite is commonly used as the anode in commercial lithium-ion batteries.

Sila Nano has developed a silicon-based anode that replaces graphite in lithium-ion batteries. The critical detail is that the material was designed to take the place of graphite in without needing to change the battery manufacturing process or equipment.

Sila Nano has been focused on silicon anode because the material can store a lot more lithium ions. Using a material that lets you pack in more lithium ions would theoretically allow you to increase the energy density — or the amount of energy that can be stored in a battery per its volume — of the cell. The upshot would be a cheaper battery that contains more energy in the same space.

The opportunity

It’s a compelling product for automakers attempting to bring more electric vehicles to market. Nearly every global automaker has announced plans or is already producing a new batch of all-electric and plug-in electric vehicles, including Ford, GM, Daimler, BMW, Hyundai and Kia. Tesla continues to ramp up production of its Model 3 and Model Y vehicles as a string of newcomers like Rivian prepare to bring their own EVs to market.

In short: the demand of batteries is climbing; and automakers are looking for the next-generation tech that will give them a competitive edge.

Battery production sat at about 20 GWh per year in 2010. Sila Nano expects it to jump to 2,000 GWh per year by 2030 and 30,000 GWh per year by 2050.

Sila Nano started building the first production lines for its battery materials in 2018. That first line is capable of producing the material to supply the equivalent of 50 megawatts of lithium-ion batteries.

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Daily Crunch: Calendly valued at $3B

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A popular scheduling startup raises a big funding round, Twitter makes a newsletter acquisition and Beyond Meat teams up with PepsiCo. This is your Daily Crunch for January 26, 2021.

The big story: Calendly valued at $3B

Calendly, which helps users schedule and confirm meeting times, has raised $350 million from OpenView Venture Partners and Iconiq.

Until now, the Atlanta-based startup had only raised $550K, but the company says it has 10 million monthly users, with $70 million in subscription revenue last year.

“Calendly has a vision increasingly to be a central part of the meeting life cycle,” said OpenView’s Blake Bartlett.

The tech giants

Twitter acquires newsletter platform Revue — Twitter is getting into the newsletter business.

TikTok is being used by vape sellers marketing to teens — Sellers are offering flavored disposable vapes, parent-proof “discreet” packaging and no ID checks.

PepsiCo and Beyond Meat launch poorly named joint venture for new plant-based food and drinks — The name? The PLANeT Partnership.

Startups, funding and venture capital

Fast raises $102M as the online checkout wars continue to attract huge investment — The new funding was led by Stripe.

SetSail nabs $26M Series A to rethink sales compensation — SetSail says salespeople should be paid them throughout the sales cycle.

Mealco raises $7M to launch new delivery-centric restaurants — By launching a restaurant with Mealco, chefs don’t sign a lease or pay any other upfront costs.

Advice and analysis from Extra Crunch

Ten VCs say interactivity, regulation and independent creators will reshape digital media in 2021 — We asked about the likelihood of further industry consolidation, whether we’ll see more digital media companies take the SPAC route and, of course, what they’re looking for in their next investment.

The five biggest mistakes I made as a first-time startup founder — Finmark CEO Rami Essaid has some regrets.

Does a $27B or $29B valuation make sense for Databricks? — A look at Databricks’ growth history, economics and scale.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

President Joe Biden commits to replacing entire federal fleet with electric vehicles — His commitment is tied to a broader campaign promise to create 1 million new jobs in the American auto industry and supply chains.

Meet the early-stage founder community at TC Early Stage 2021 — Early Stage part one focuses on operations and fundraising and takes place on April 1-2, while Early Stage part two focusing on marketing, PR and fundraising and runs July 8-9.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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