Investing and operating in the space domain.

>> Maria Varmazis: The Q1 2023 Space Investment Quarterly Report is out from Space Capital. It's got an overview of trends in the space economy with the lens of venture capital funding. But between higher interest rates and challenging economic circumstances overall, things are a bit rough out there as in VC investments in space are down 50% year over year kind of rough. Today is April 21st, 2023. I'm Maria Varmazis and this is T-Minus. Let's take a look at those VC numbers for Q1. SDA's Tranche 2 coming soon to an orbit near you. The FCC's Space Bureau announces new regulations. And my conversation with Scott Stalker, Master Gunnery Sergeant in the US Marine Corps and Command Senior Enlisted Leader at US Space Command. He shares how the combatant command is adapting to new challenges in the digital era of space operations, new operational concepts, and building the force to deter aggression. You definitely do not want to miss it. So, stay with us. Here is your intel briefing for today. Back to the story from the top of the show. The Q1 2023 numbers for VC funding in space startups are out from the folks at Space Capital. I wish we had a rosier picture to paint for you but, yeah, these are lean times financially for a lot of companies. In fact, Space Capital reports that VC funding in space startups fell by 50% year over year to $76 billion globally, which marks the lowest amount of VC funding in space startups in the last 13 quarters. Q1 2023 specifically was hard. $2.2 billion in VC funds were invested in that time, a 53% drop from Q4 2022. Space Capital says that this makes this the lowest quarter for space investment since 2015. If we zoom out for a wider 10-year view, since 2014, the space economy has seen $272.2 billion of equity invested into 1746 companies.

And I should note that I interviewed Space Capital founder and managing partner Chad Anderson in the Tuesday, April 18th show. We talked about macro trends and opportunities looking forward. So, definitely go have a listen to that show if you haven't heard it yet.

And sticking with investment news for a moment, just a few more notes to share here. Mobile satellite communications company Iridium says their Q1 2023 financials are out. The company reports a $9.8 million net income and a $111.9 million EBITDA, which is up 9% year over year. Iridium revenue is also up 22% compared to this time last year with the Q1 2022 revenue of $205.3 million. Growth and commercial business, specifically new subscribers and equipment are largely to thank for the growth in this quarter, says Iridium CEO Matt Desch.

Maxar shareholders have given the company the green light to go private and to be acquired by Advent International to the tune of $53 a share which translates to roughly $4 billion in cash. Daniel Jablonsky, Maxar's President and CEO says this move will allow the company to speed up work on parts of a new Earth observation satellite constellation. Pending regulatory approval, the transaction is expected to close late this month or in May.

L3Harris just won a $145 million contract from the US Space Force to update their space domain awareness infrastructure, specifically the Maintenance of Space Situational Awareness Integrated Capabilities or MOSSAIC program. Part of the award to L3Harris will be to update MOSSAIC's infrastructure that supports machine-to-machine tasking, which as the name might suggest, improves the ability for spacecraft to track and respond to other craft or space objects nearby.

The Space Development Agency is set to issue solicitations for Tranche 2. Proposals for the Tranche 2, low Earth orbit or LEO constellation, and the transport layer alpha are set for this summer. And Tranche 2 tracking solicitation will be released in the fall.

The SDA just saw the launch of its first 10 satellites for Tranche Zero, the Demonstration Tranche. The agency wants to test link 16 capabilities from space with Tranche Zero but does not yet have the approval from the FAA.

As we've been mentioning in earlier episodes, the Federal Communications Bureau is kind of drowning under tens of thousands of requests for new satellites so it should come as no surprise that the regulators' recently established space bureau has announced new rules in its first week of operations. The new rules govern how operators and non-geostationary orbit or NGSO share the spectrum. The FCC is particularly concerned with how operators awarded fixed satellite serviced NGSO licenses would avoid interfering with each other. The FCC has also introduced measures to encourage operators to coordinate their systems "in good faith," including information sharing. We'll see if they're able to play nice.

The US Space Force has awarded Astra Space an $11.5 million task order through the orbital services program or OSP for the contract. The Space test program S29B launch service will conduct scientific experiments and technology demonstrations with the goal of advancing the Department of Defense's space capabilities. Astra Space will use its rocket 4 to deliver the mission manifest to low Earth orbit. Space test program S29B has an initial launch capability set for April 2025.

NASA administrator Bill Nelson has warned of a space race between the US and China. Nelson told the House Appropriations Committees Commerce, Justice, and Science Subcommittee that the Wolf Amendment which restricts cooperation between Chinese and American organizations should be maintained. Nelson warned members of the committee that NASA and its partners needed to get to the lunar South Polar region before China claims the resources there. The Wolf Amendment does allow NASA to cooperate with China in limited circumstances, provided there's a security review and congressional notification.

The US Space Command has signed new cooperation agreements with Australia's Space Defense, the Italian military, and the Peruvian air force. The announcements came on the last day of the 38th Space Symposium in Colorado Springs. US Space Command has established 170 space situational awareness-sharing agreements with partners from the commercial sector, academia, and foreign and intergovernmental agencies. In a recent statement, the agency said these agreements enhance the safety, stability, security, and sustainability of space flight for all.

The Defense Advanced Research Projects Agency or DARPA is seeking proposals for antenna designs, materials, manufacturing, or processing as the first topic issued under the agency's bringing classified innovation to defense and government systems or BRIDGES Initiative. The BRIDGES effort aims to connect small companies that traditionally don't work with the US government to classify Department of Defense research and development efforts. DARPA plans to solicit responses to multiple technical topics under BRIDGES introduced periodically. And that's our briefing for today. Stick around for my conversation with Master Gunnery Sergeant Scott Stalker about how US Space Command is adapting to the new challenges ahead in this digital era of space operations. The United States Space Command's mission is to make sure there's never a day without space. The importance of these space-based systems in the daily life for civilian and military use is growing fast. The pace of the evolution of threats to space systems is breakneck. And the nature of those challenges are increasingly technically complex and sometimes physically precarious. There's nothing easy about this. And that's why there's a great deal that the US Space Command is doing to try and meet if not get ahead of these challenges, all while building relationships with industry partners, and most importantly, training the people who deploy and defend these crucial space systems.

To learn more about how the US Space Command is working to meet these challenges head-on, I spoke with Master Gunnery Sergeant Scott Stalker, the command senior enlisted leader for the United States Space Command. Can you help me understand the challenges facing Space Command, specifically in protecting space assets from cyber threats specifically, and maybe the priorities that you have to address those?

>> Scott Stalker: Yeah, a great question again too. And so, there's two things I want to touch on here. One is I'm certainly not going to give the adversary an understanding of where we have challenges but what I will say is anyone that operates in space has to protect both the space capability whether that's a satellite, or whatever that is, in space, we have to protect the ground station, and then the link in-between. And so, all of those three, again, the space capability, the ground station, and the link require great cybersecurity. And we have to defend that.

We have done an exceptional job here of what we call integrating capabilities through this entirety of integrated deterrence. And so, as this command was built, and we're just a few years old, so we started on the 29th of August 2019 whereas the Space Force came a few months later on the 20th of December 2019. And so, as we built this command, we built this with an understanding of the importance of cybersecurity.

And so, Cyber Command has provided us what we call a cyber operations integrated planning element, those are people here that have the authorities of Cyber Command working in Space Command and getting after our challenges. We have a joint cyber center as well, and those are cyber professionals making sure that we're securing our critical infrastructure. And then the Space Force, when they stood up, they created what they call deltas, and those are commands run by colonels, O6 level commanders. They have a delta 6 which gets after our critical space infrastructure and they provide cybersecurity there. So, all of that integrated.

And then really what's exceptional is the fact that we have a commercial integration cell, we have partners and allies. And that's where we have a great strength that our competitors don't necessarily have is we have allies working in our building, working collectively together to make sure that we have integrated deterrence enabled to do global operations, and then the commercial integration cell.

So, all of that combined is really baked into from the beginning and it's not where it was in many years -- many year ago where sometimes cyber was an afterthought. We started understanding the critical needs of cyber and the integration between Cyber Command and Space Command. And so, it's baked in from the start and it really, again, three years old where we continue to mature this out, understand our challenges. And we exercise this too. And I think the goodness of exercising is not so much just the exercise, it's when we're done, we assess ourselves and say, hey, how can we improve? I hope that answers your question.

>> Maria Varmazis: It certainly does. And there's a lot of really interesting information in there so I want to, first, I imagine with the dual expertise of both cyber and space, as you mentioned, that would also help address, not just the nature of the evolving threat but also the pace, correct?

>> Scott Stalker: Absolutely. And so, that gets to why we do these exercises. That's why I focus a lot on the development of our people because we have to understand we've got to be ready. And the beautiful thing of this command is we're hyper-focused on our war-fighting readiness, making sure that if the President or the Secretary of Defense calls on us or the joint force, we can provide those capabilities at a moment's notice. We hope that doesn't happen, we certainly want to deter aggression and make sure that there isn't a conflict, but because of the pace of both cyber and space, we don't have time to, you know, take time off and get ready, we have to be ready.

>> Maria Varmazis: Speaking of personnel development, I know that this is an area that's particularly close to your heart so can you walk me through how the Space Command is evolving its approach to training, especially perhaps in regards to enlisted troops?

>> Scott Stalker: Absolutely. We are focused as a command on deterring aggression, on defeating our enemies, on delivering capabilities to the joint force and defending this nation. And I call those our four Ds. Those four Ds are quintessential, those are our requirements that we've got to do every single day. But in order to do those four Ds, we've got to do what I call the 50, and that is development. And development has to be by design. It can't be, you know, a check in the box, an annual one-hour presentation.

And so, by design, from the get-go when I got here, I really set out on a mission to make sure that we are talking at the army sergeant major's academy, we are talking at the Marine Corps University, Air University, the Joint Special Operation University, all of those critical professional military education universities that develop the joint force, they fully understand the threat. And the reason they've got to understand the threat is that's context, right? So, Simon Sinek says start with why. That gives them their why. They understand why they do what they do.

We saw in 2014 when Russia illegally annexed Crimea, we saw on the 15th of November when Russia shut down one of their own satellites using their own missile and shut down one of their own satellites, left thousands of pieces of debris up there. We saw on the 24th of February, just a few months later in 2022 when they illegally invaded Ukraine and continue to execute their war of choice. We saw all of that happen. And so, making sure my folks, the people here, and it's not just enlisted but it's one of my focus areas, fully understand that that threat is real, that we have adversaries, both China and Russia, that have conducted a destructive test in space and left thousands of pieces of debris up there. This is real.

And the other piece of this too, and I want to emphasize this, Maria, is space is not new. And what I mean by that is space has been providing capabilities to combat operations since Vietnam where we actually had satellites providing Satcom and -- not Satcom so to speak, but communications, and making sure that we understood the weather. And that was, you know, early on in this and it's matured now to where we can execute satellite communications globally. We can have intelligence surveillance and recognizance globally, we can do precision guiding munitions globally, and you saw that in Desert Storm what we called smart bombs if you will, and certainly use GPS and that sort of thing. So, it's real. And that's why developing our people is a focus area of mine.

>> Maria Varmazis: And you also mentioned earlier about industry partnership. Can you go into a little bit more detail about maybe some of the opportunities there or things that you're excited about in regards with working with the industry?

>> Scott Stalker: Yeah, it's a big deal. And coming up, we have what we call the Space Symposium shortly. And that is a huge event right out here in Colorado Springs where we gather, we gather with partners and allies, we gather with many members of the industry. And that's a great opportunity for us to talk about our issues and challenges in this domain, and for our industry to address those and look at where they can innovate and move rapidly to provide capabilities. It's an exceptional partnership right out in Vandenberg Space Force Base. We have what we call the Commercial Integration Cell, the CIC.

On that watch floor, at all levels of classification, we have members of industry sitting there. And the importance of that is, one, they understand, not just the challenges and the threat today but what the future looks like. And then maybe even more important for us is their ability to innovate and provide capabilities for us. And we've seen the importance of this. You've seen a couple of commercial companies, without calling out specific names, as Russia invaded Ukraine, we saw that they were able to provide capabilities to the Ukraine people to make sure that they continue to communicate. Remarkable speed, agility, and in many ways, it's the evolution of conflict, if you will, where we often would focus on this idea of a whole of government approach.

And in space at least it's expanded past that, it's more of a whole-of-society approach where we have certainly the government, but we have partners and allies that are outside of the government. We have industry, we have academia all collectively working together to make sure that we can ensure that there's never a day without space. So that when you want to use your cell phone, when you want to watch a game on TV, when you want to make an ATM transaction, or when you need to navigate or fly an airplane, all of those capabilities that we take for granted will continue to work. And that is because of the great people that we have in the Commercial Integration Cell and our relationships with them, which are critical.

>> Maria Varmazis: Many of our listeners are especially in the industry. Anything you would like to say in terms of what you would like to see, what industry can do to help? I know we've touched on that a little bit but I just wanted to give you some open space to address the industry.

>> Scott Stalker: Yeah, let me say exactly what General Dickinson says and that is we are open for business. We have on our website an industry portal. And so, if you have a smart idea, if you have a great capability, if you are a talent looking for employment, we are open for business. We are open for good ideas, we are not focused on how it used to be, we're looking at what it will be in the future. And so, whether it's Space Symposium coming up or, you know, and I have an awful lot of individuals reach out to me and ask to have conversations about a widget they have or an idea that they have. Again, we're open for business and we're open to those ideas with our partners and allies and with the commercial sector and academia as well, which is critical to this. And so, I would say reach out to us with your great idea. Reach out to us and so we can understand how we can provide better cybersecurity so those three segments I talked about are defended and so that we can ensure that there never is a day without space.

>> Maria Varmazis: Master Gunnery Sergeant Scott Stalker, thank you so much for joining me today. I really appreciate your time and it's been a delight speaking with you.

>> Scott Stalker: You too, Maria. Thank you very much.

>> Maria Varmazis: A quick programming note. This was only about half of our conversation. You can hear the entire interview in full in our special edition called "Deep Space" which we will publish tomorrow April 22nd. And we'll be right back. Welcome back. Now, here is one for the history books. In two short weeks, 93-year-old Colonel Buzz Aldrin is going to become Brigadier General Buzz Aldrin. You heard that right. The Space Force is planning to promote retired Air Force Colonel Buzz Aldrin to the honorary rank of Brigadier General on May 5th at the Los Angeles Air Force Base in El Segundo, California. A New Jersey native and West Point grad, Buzz flew the F-86 Sabre in 66 combat missions, shot down two MiG-15s during the Korean War, got a doctorate in astronautics from MIT, was selected as one of the 14 members of NASA's Astronaut Group 3, performed the first successful spacewalk, took the first selfie in space, and with Neil Armstrong made the world's historic first moonwalk. Though our Executive Producer is a Navy grad, he's going to let this one slide. Go army, go Buzz, and get your ass to Mars. Congratulations, General Buzz Aldrin, you've earned it. And that's it for T-Minus for April 21st, 2023. For additional links and resources from today's report, check out our show notes at space.n2k.com. You know, we'd love to know what you think of this podcast. You can write us an email at space@n2k.com or submit the survey in the show notes. Your feedback ensures that we deliver the information that keeps you a step ahead in the rapidly changing space industry.

We're privileged that N2K and podcasts like T-Minus are part of the daily routine of many of the most influential leaders and operators in the public and private sector. From the Fortune 500 to many of the world's preeminent intelligence and law enforcement agencies. N2K's strategic workforce intelligence optimizes the value of your biggest investment, your people. We make you smarter about your team while making your team smarter. Learn more at n2k.com.

This episode was produced by Alice Carruth; mixing by Elliott Peltzman and Tré Hester with original music and sound design by Elliott Peltzman. Our executive producer is Brandon Karpf. And I'm Maria Vermazis. Thanks for listening and see you Monday.