Exo-Space is currently raising via convertible debt at a $7.5 million valuation with a 15% discount. This price seems quite low, but the company has experienced little traction. So our system has rated Exo-Space’s price about average on its one-to-five scale.

Exo-Space is operating in the global satellite data services market. According to one source, this market was valued at $5.3 billion in 2019 and is expected to grow at a 27.9% annual rate to reach $36.9 billion by 2027. A second source pegged the market opportunity at $5.5 billion in 2019, with an annualized growth rate of 19.1% taking it to $19.4 billion by 2027. The overall small size of this space is slightly discouraging, but the high expected growth rate helps to offset this to some degree. Therefore, Exo-Space’s market opportunity score is above average.

Exo-Space has three co-founders: CEO Jeremy Allam, lead mechanical engineer Marcel Lariviere, and business development head Mark Lorden. Prior to founding Exo-Space, Allam was a flight software engineer at NASA’s Jet Propulsion Laboratory. Before that, he was a software specialist and engineer at the Space Engineering Research Center. At one point, he also served as a geophysicist at Schlumberger. He has a master’s degree in astronautical engineering. 

Lariviere previously worked as a ride apprentice engineer at Walt Disney Imagineering, and before that, he was a mechanical and structures engineer lead at USC Space Engineering Research Center. 

Lorden previously worked as a mechanical engineer at SMP Engineering. While there, he focused on automation and product development. He also worked as a project design engineer at Norchem Company, where he focused on eco-friendly technology projects. He worked as a coding and braking system design professional at Caltech and also had a brief stint as a teaching assistant at the Caltech robotics lab. Overall, the Exo-Space team has enough relevant experience to warrant an above-average team score.

Exo-Space’s competition includes Ubotica Technologies, Antmicro, and KP Labs. Two things in particular set Exo-Space apart from these other businesses. First, Exo-Space claims its technology is currently the only one to be able to integrate with any satellite bus — a model on which multiple-production satellite spacecraft are often based — on the market today. Second, it claims to have the fastest processor available. Because of this, our system has rated the company’s differentiation near the high end of our scale.

Exo-Space generated just $25,163 in revenue in 2020, which is quite low. Net income came out to $2,711, while operating cash flow was $3,674. While it’s a good sign that these figures are positive — many startups have a negative net income at this stage — this doesn’t necessarily mean the company is executing well. It’s more likely that Exo-Space just doesn’t have infrastructure or payroll costs cutting into its bottom line. The company’s product is also not fully developed.

Exo-Space has three letters of intent (LOIs) that add up to 45 units. At its current pricing, this would equate to $4.5 million in revenue over an 18-month window. Investors should be aware, however, that LOIs are often not legally binding. So it’s possible that the clients could back out of the deal. With its limited customer base, losing one or two contracts would be devastating for Exo-Space. Given all of this, our system has rated Exo-Space’s performance below average on our scale.

Exo-Space has elevated risk in two categories. The first is product risk. Given that Exo-Space’s product is still in development, it is unclear whether it can survive in space and do all that management claims it is capable of doing. The second is funding risk. Exo-Space has yet to achieve any funding milestones, and its business model is based on a long-term payout. It also operates in a capital-intensive space. So Exo-Space could run out of money before it gets off the ground. Down the road, this could either sink the company or force a potentially difficult funding round.

Exo-Space operates in a rather niche market, which could limit its growth potential. Aside from its letters of intent, the company’s performance has also been discouraging so far. It has generated a little over $25,000 in revenue and has an incomplete product. Plus, Exo-Space’s current customer base is smaller than investors would likely prefer, which could put the business at risk if it loses its existing customers. The company is also relying on a long-term payout, which amplifies its risk of running out of money in the interim.

Despite its challenges, Exo-Space is raising at an appealing valuation, and it already has a few letters of intent under its belt. Though the company’s market opportunity is small, it is growing at a rapid pace. The company’s product also appears highly differentiated from the competition. In addition, aside from Exo-Space’s product and funding risks, the company’s risk profile is fairly reasonable.

Exo-Space uses edge computing technology to quickly and efficiently transfer data from satellites. The company is an appealing prospect for several reasons. First, the company is raising at an attractive valuation and has a few companies interested in using its product. The company claims its product has the fastest processor on the market and is compatible with any kind of satellite bus, which sets it apart from its competitors. It is also operating in a rapidly growing market, and the company has a decent risk profile.

Exo-Space also has certain risks that investors need to be aware of. Although the market is growing, Exo-Space is still operating in a rather niche market and currently has a small customer base. It faces product and funding risk, and there’s no guarantee its potential customers will end up using its product. Finally, its financial performance has been mediocre. Overall, KingsCrowd has rated the company a Neutral Deal.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com. 

Analysis written by Daniel Jones.