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Omnispace raises $60M to fuse satellites and 5G into one ubiquitous network

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5G has been on a tear the last few years as wireless operators and smartphone manufacturers have made a marketing push touting higher bandwidth and lower latency for users. Yet, for all the attention that 5G gets from consumers, some of the most important new applications for the next-generation wireless technology are actually on the enterprise side. The canonical example is self-driving cars, which will presumably rely on a combination of edge computing, low latency and high bandwidth in order to work.

Yet, there are far more applications that are perhaps even more interesting and more readily deployable today than AVs. On farms, connectivity can help with managing equipment, monitoring livestock, and analyzing water usage to optimize plant growth. Logistics companies need to monitor global supply chains, tracking shipping containers as they wend their way around the world from port to port.

There’s just one problem: 5G wireless is hard to implement in rural areas where base stations are unprofitable to deploy and therefore few and far between. On the oceans of course, there are no wireless base stations at all.

DC-based Omnispace wants to offer ubiquitous 5G-compliant connectivity for enterprise users using a hybrid of wireless ground technology and satellites. The idea is that by integrating these two different modes — terrestrial and space — into one cohesive package, end users like agriculture and logistics companies wouldn’t have to transition their IoT connectivity between different types of technologies in order to secure the promise of 5G.

Today, the company announced a $60 million equity investment led by Joshua Pack of Fortress Investment Group, who serves as the burgeoning firm’s head of credit investing and also co-leads one of the firm’s SPACs, Fortress Value Acquisition. Existing investors Columbia Capital, Greenspring Associates, TDF Ventures and Telcom Ventures also participated in the round.

Omnispace started in 2012 as a holding company for wireless spectrum assets, particularly around the 2Ghz “S band” spectrum, which were purchased from the remnants of ICO Global, a satellite-based provider that had previously gone into bankruptcy. CEO Ram Viswanathan, who joined Omnispace in early 2016, said that the company started looking at how to use a technology layer to integrate its various assets together, eventually identifying an opportunity around global 5G connectivity with specific applications in IoT.

“The 5G rollout is going to be gated by the scope and rollout of mobile operators,” Viswanathan said. “Neither all of the landmass or customers are going to be covered” using traditional ground-based wireless technology. “Satellite’s main utility is really extending the reach of the network into more remote and rural areas.”

Viswanathan has spent decades in the satellite and wireless market, most recently as the co-founder of Devas Multimedia, an India-focused connectivity startup that has been embroiled in a long-running legal spat with the government there over the cancelation of the firm’s satellite launch, with U.S. courts recently ordering a government-affiliated commercialization business to pay Devas $1.2 billion in compensation.

While there is perhaps an easy comparable with SpaceX’s Starlink project, Omnispace is not focused on the consumer broadband market, but rather enterprise and IoT use cases. Furthermore, Omnispace is a hybrid network using a mix of different technologies, whereas Starlink is focused only on space deployment.

Omnispace is using its new capital from Fortress to flesh out its services and finish up pilot trials with some mobile operators and prepare the network for commercial usage starting in 2023, with the network ready in 2022. Viswanathan said that “our aim is to provide the service globally” with “a footprint that covers everywhere.”

Omnispace has contracted with Thales Alenia, part of the French space and defense conglomerate Thales Group, to execute on its space strategy. On the terrestrial side, it is tying together its spectrum assets and piloting with several mobile operators to bring out a cohesive solution, with early strength in Asia-Pacific and Latin America.

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

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Snowflake latest enterprise company to feel Wall Street’s wrath after good quarter

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Snowflake reported earnings this week, and the results look strong with revenue more than doubling year-over-year.

However, while the company’s fourth quarter revenue rose 117% to $190.5 million, it apparently wasn’t good enough for investors, who have sent the company’s stock tumbling since it reported Wednesday after the bell.

It was similar to the reaction that Salesforce received from Wall Street last week after it announced a positive earnings report. Snowflake’s stock closed down around 4% today, a recovery compared to its midday lows when it was off nearly 12%.

Why the declines? Wall Street’s reaction to earnings can lean more on what a company will do next more than its most recent results. But Snowflake’s guidance for its current quarter appeared strong as well, with a predicted $195 million to $200 million in revenue, numbers in line with analysts’ expectations.

Sounds good, right? Apparently being in line with analyst expectations isn’t good enough for investors for certain companies. You see, it didn’t exceed the stated expectations, so the results must be bad. I am not sure how meeting expectations is as good as a miss, but there you are.

It’s worth noting of course that tech stocks have taken a beating so far in 2021. And as my colleague Alex Wilhelm reported this morning, that trend only got worse this week. Consider that the tech-heavy Nasdaq is down 11.4% from its 52-week high, so perhaps investors are flogging everyone and Snowflake is merely caught up in the punishment.

Snowflake CEO Frank Slootman pointed out in the earnings call this week that Snowflake is well positioned, something proven by the fact that his company has removed the data limitations of on-prem infrastructure. The beauty of the cloud is limitless resources, and that forces the company to help customers manage consumption instead of usage, an evolution that works in Snowflake’s favor.

“The big change in paradigm is that historically in on-premise data centers, people have to manage capacity. And now they don’t manage capacity anymore, but they need to manage consumption. And that’s a new thing for — not for everybody but for most people — and people that are in the public cloud. I have gotten used to the notion of consumption obviously because it applies equally to the infrastructure clouds,” Slootman said in the earnings call.

Snowflake has to manage expectations, something that translated into a dozen customers paying $5 million or more per month to Snowflake. That’s a nice chunk of change by any measure. It’s also clear that while there is a clear tilt toward the cloud, the amount of data that has been moved there is still a small percentage of overall enterprise workloads, meaning there is lots of growth opportunity for Snowflake.

What’s more, Snowflake executives pointed out that there is a significant ramp up time for customers as they shift data into the Snowflake data lake, but before they push the consumption button. That means that as long as customers continue to move data onto Snowflake’s platform, they will pay more over time, even if it will take time for new clients to get started.

So why is Snowflake’s quarterly percentage growth not expanding? Well, as a company gets to the size of Snowflake, it gets harder to maintain those gaudy percentage growth numbers as the law of large numbers begins to kick in.

I’m not here to tell Wall Street investors how to do their job, anymore than I would expect them to tell me how to do mine. But when you look at the company’s overall financial picture, the amount of untapped cloud potential and the nature of Snowflake’s approach to billing, it’s hard not to be positive about this company’s outlook, regardless of the reaction of investors in the short term.

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A first look at Coursera’s S-1 filing

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After TechCrunch broke the news yesterday that Coursera was planning to file its S-1 today, the edtech company officially dropped the document Friday evening.

Coursera was last valued at $2.4 billion by the private markets, when it most recently raised a Series F round in October 2020 that was worth $130 million.

Coursera’s S-1 filing offers a glimpse into the finances of how an edtech company, accelerated by the pandemic, performed over the past year. It paints a picture of growth, albeit one that came at steep expense.

Revenue

In 2020, Coursera saw $293.5 million in revenue. That’s a roughly 59% increase from the year prior when the company recorded $184.4 million in top line. During that same period, Coursera posted a net loss of nearly $67 million, up 46% from the previous year’s $46.7 million net deficit.

Notably the company had roughly the same noncash, share-based compensation expenses in both years. Even if we allow the company to judge its profitability on an adjusted EBITDA basis, Coursera’s losses still rose from 2019 to 2020, expanding from $26.9 million to $39.8 million.

To understand the difference between net losses and adjusted losses it’s worth unpacking the EBITDA acronym. Standing for “earnings before interest, taxes, depreciation and amortization,” EBITDA strips out some nonoperating costs to give investors a possible better picture of the continuing health of a business, without getting caught up in accounting nuance. Adjusted EBITDA takes the concept one step further, also removing the noncash cost of share-based compensation, and in an even more cheeky move, in this case also deducts “payroll tax expense related to stock-based activities” as well.

For our purposes, even when we grade Coursera’s profitability on a very polite curve it still winds up generating stiff losses. Indeed, the company’s adjusted EBITDA as a percentage of revenue — a way of determining profitability in contrast to revenue — barely improved from a 2019 result of -15% to -14% in 2020.

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The owner of Anki’s assets plans to relaunch Cozmo and Vector this year

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Good robots don’t die — they just have their assets sold off to the highest bidder. Digital Dream Labs was there to sweep up IP in the wake of Anki’s premature implosion, back in 2019. The Pittsburgh-based edtech company had initially planned to relaunch Vector and Cozmo at some point in 2020, launching a Kickstarter campaign in March of last year.

The company eventually raised $1.8 million on the crowdfunding site, and today announced plans to deliver on the overdue relaunch, courtesy of a new distributor.

“There is a tremendous demand for these robots,” CEO Jacob Hanchar said in a release. “This partnership will complement the work our teams are already doing to relaunch these products and will ensure that Cozmo and Vector are on shelves for the holidays.”

I don’t doubt that a lot of folks are looking to get their hands on the robots. Cozmo, in particular, was well-received, and sold reasonably well — but ultimately (and in spite of a lot of funding), the company couldn’t avoid the fate that’s befallen many a robotics startup.

It will be fascinating to see how these machines look when they’re reintroduced. Anki invested tremendous resources into bringing them to life, including the hiring of ex-Pixar and DreamWorks staff to make the robots more lifelike. A lot of thought went into giving the robots a distinct personality, whereas, for instance, Vector’s new owners are making the robot open-source. Cozmo, meanwhile, will have programmable functionality through the company’s app.

It could certainly be an interesting play for the STEM market that companies like Sphero are approaching. It has become a fairly crowded space, but at least Anki’s new owners are building on top of a solid foundation, with the fascinating and emotionally complex toy robots their predecessors created.

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