Renato Panesi is Chief Commercial Officer and Founder of D-Orbit, a space logistics company headquartered in Italy providing solutions for satellite design, development, launch, commissioning, and decommissioning.
Before D-Orbit, Renato worked as Systems Engineer and then in the Sales & Marketing Department at Oto Melaria, a Leonardo Company in Italy and abroad (Asia and Oceania).
Renato graduated in Aerospace Engineering and received a Ph.D. in Aerospace Engineering, Flight Mechanics/Dynamics from Università di Pisa.
Q: In 2011, you decided to co-found D-Orbit, a space logistics company that optimises operations both in orbit and on the ground through last-mile delivery of satellites, orbital transportation, space logistics, and space waste management. What led you to this decision and how did the idea of D-Orbit come about?
Renato: It all started thanks to a scholarship I won in 2009 that allowed me to move to Silicon Valley for a year to study business and learn how to build a business plan and launch a startup. I worked on my Ph.D. research project, so I turned a purely academic project into a business project.
In Silicon Valley, I met Luca Rossettini, the co-founder of D-Orbit, an aerospace engineer like myself but with a different background: he is specialised in propulsion, I am specialised in attitude control. We combined our skills and we developed the D-Orbit business plan between 2009 and 2010. Afterward, we both did an internship at NASA’s Ames research centre in California, where we confirmed our business plan.
Then we went back to Italy, and we started proposing our project to several investment funds. The first investor who bet on us was Fondamenta SGR (that changed the name into Quadrivio SGR and now Indaco SGR). We started D-Orbit in March 2011.
The name D-Orbit comes from the first product we developed, which was a device to return satellites to Earth at the end of their operational life. It’s a manoeuvre that in jargon is called de-orbiting. The first product is the one that allowed us to develop most of the technology that offer today. Now, it is one of the various lines of business that we have developed over time.
Q: So, what solutions does D-Orbit offer? What’s your view on the space industry?
Renato: The space economy, apart from the enormous amount of money it moves, is an industry that remains a bit of a niche.
The concept of space as a place of contention between the great superpowers (i.e., the United States and the former Soviet Union) and large government programmes no longer exists. This concept disappeared after the dissolution of the Soviet Union.
At the same time, private initiative has grown and continues to grow. New technologies make it possible to build infrastructures (i.e., to build satellites, launch them and operate them) at a much lower cost than 20-30 years ago. And the approach to satellite management has also changed. It used to be that a two-tonne satellite was built to have an operational life in orbit of 15 years.
Today, we build much smaller, much lighter, and therefore much cheaper satellites with a very short operational life (2 to 4 years), so that they can be replaced by new satellites. In this way, we have satellites that are always at the cutting edge of technology.
Access to space at a lower cost means that many institutional and governmental entities, as well as many developing countries, now have access to space. It also enables the arrival of many private companies that want to sell Earth observation data, such as infrared photographs, radar images, etc. Companies offering connectivity services, gateways to connect people, machines, phones. Moreover, there is a strong development of IoT technologies, which will translate into a growing need for data traffic. And using data provided by satellites will allow to cover any point on earth. The applications are the most varied: air traffic control, maritime traffic control, fire prevention, etc. To offer data, these companies need providers who build, launch and operate satellites. This is how the space economy was born.
The expected growth of the industry is exponential. Between 1957 (when the first Sputnik was launched) and the early 2000s, 6,000 satellites were launched. It is expected that 23,000 satellites will be launched by 2030. Now there are also big private players such as Space X, Amazon, OneWeb, but also Canon and Samsung, which are launching their constellations of thousands of satellites offering global coverage.
To manage such an infrastructure, space logistics is needed. Satellites not only have to be launched but they also need to be correctly positioned in orbit. When a launch takes place, the rocket acts like a bus, carrying a cluster of many satellites on behalf of customers. Once the rocket reaches its destination, it releases all the satellites. After that, each satellite must reach its operational orbit. Normally it is done by inertia (satellites have an onboard propulsion system that is designed for attitude control and in-orbit holding manoeuvres, not for moving).
D-Orbit helps satellites to cover this “last mile”. We use our device ION (which stands for InOrbit NOW), a space vehicle able to host and deploy smaller satellites on behalf of our customers. And we do it in a few weeks instead of several months. This is a benefit for our customers because firstly we are able to extend the operational life of a satellite. For example, if the satellite has an operational life of three years, and it takes one year to reach the destination by inertia, that means that one-third of its operational life is “wasted”. Secondly, by having their satellites reach their operational destination in a shorter time, clients can generate revenue earlier. And for an operator that spends large amounts of money designing satellites, building them and launching them, this is quite relevant.
Q: How is the business going? What are the expected developments of D-Orbit?
Renato: To date, we are the only ones with heritage, in the sense that we are the only ones with two commercial missions under our belt, in addition to the tests carried out earlier. The first mission took place in September 2020 on an Italian and European Vega launcher. And the second one with Falcon 9 in January 2021. Both rockets have already deployed all our customers’ satellites, and are still in orbit carrying out the rest of their mission. We are now preparing for another mission scheduled for June 2021.
Therefore, to date, we are the only ones who have validated the technology. There are other competitors, mainly American, who have ideas and business models quite similar to ours, but they are few.
The evolution of our ION, on which we are working, will allow us in the future – in missions from 2023 onwards – to carry out another piece of activity that falls under space logistics, which is the “in-orbit servicing”. With ION, we will be able to operate on satellites that are already in orbit, for example doing small repairs, visual inspections, we will be able to extend the operational life of the satellites by adding new propellant, etc. And at the end of their operational life, we will be able to dock them, remove them and bring them back to Earth.
This activity, called “active debris removal”, is important for two reasons: first, to clean up and rid space of non-operational satellites that are completely out of control, to avoid possible collisions in the future. The risk today is remote, but with such an exponential increase in launches, the risk will grow in the future. Secondly, the space occupied by the wreckage will have to be freed up to accommodate the new replacement satellite, which has to be there to operate at its best.
Q: The space economy is an industry that requires a huge amount of capital, and this is particularly true for the upstream segment. You raised more than € 20 million in equity in several fundraising rounds. How was the fundraising process? What would you suggest to entrepreneurs approaching a fundraising round?
Renato: Our industry is very capital intensive and the return on investment is long. To date, we have raised €22 million in equity. We have also raised capital in other forms of funding such as grants from the European Commission and the European Space Agency, which allow us to cover the non-recurring costs of developing our technologies. Also, we have had a loan from the European Investment Bank.
The first piece of advice I would give to entrepreneurs raising money is to carefully select the investors you are pitching to because they are not all good for your company. Rather than making pitches for everyone, it is better to do some intelligence on investors and approach the right ones.
Today, D-Orbit has both Italian and foreign investors on board, such as Seraphim Capital – which is the first venture fund specialised in space and drone sectors – an Australian fund, a Silicon Valley fund, the venture capital part of Cassia Capital and European, British and American family offices.
The big difference came with the arrival of foreign funds. It was not easy to negotiate an investment having different cultures and following different approaches, even concerning small formal and procedural things (e.g., the accounting standards adopted). Today we are well equipped, and future fundraising will be international.
Furthermore, if the company grows thanks to several subsequent fundraising rounds, the cap table must be adequate. Founders with too few shares are not seen as sufficiently motivated by the investor. Also, the investor wants to see stock options for key management figures. It is always said that the team is very important. As long as the company is a startup, the key team are the founders, when it becomes a scaleup, there are so many other management figures that are considered key. So, it becomes important to give incentives in the form of stock options to all the key figures that you want to motivate and retain.
Q: D-Orbit today has more than 100 employees in four offices (Como – close to Milan, Lisbon, London and Washington). What are the main issues you are experiencing in the growth phase? What would you suggest to founders approaching the scaling-up phase?
Renato: We started with two people, and today we are a company with more than 100 people and four offices around the world.
The head office is in Fino Mornasco (Como, Italy), and it is our headquarters where we develop all the hardware and where all the main functions are centralised.
We have a second office in Lisbon, which is our software house. The office was created following an international business plan competition that we won in 2012. We received a cash prize to spend locally. We were then approached by the venture capital part of Cassia Capital, which gave us the capital to create an office in Portugal. Today, the Portuguese office is an independent and autonomous subsidiary company, besides being a software house for us, it serves its client portfolio.
We have another office in the UK, near Oxford, at a science and technology park that is dedicated to business development and advanced concepts, i.e., tomorrow’s business with technologies being developed today. We wanted to be present in the UK because, being always in fundraising, we thought that having a footprint in a country where the venture capital model is more rooted than in Italy was appropriate. Also, with Brexit, the UK would have left many European programmes and we knew the country would have invested capital in the space to acquire its autonomy to other European countries. Besides, one of our most important investors, Seraphim Capital, is English.
And then we have a purely commercial office in Washington. With the proceeds of the next round we are working on, among the activities we want to pursue there is the expansion into the US market with a new office and a production facility.
In the scaling-up phase, the team and the selection of the right people is the most important element. At the end of the day, the real intrinsic value of a startup is the people. Choosing the team carefully is crucial. We have a very young team, with an average age of under 30, which is not common in the space industry.
We are very open with the whole team. We share what we are doing, where we are going, what the steps are, what the latest results are. We share everything with the team, with a very open mind.
It happened that some years ago we found ourselves in the situation where we were finalising an investment round, but we had bureaucratic delays, so we were almost out of cash for a while, and we would have had to stop all our activities pending the investment. But we needed to move forward with our plan, otherwise we would have risked missing a launch, losing a year’s work. While we, of course, did not ask for anything, the D-Orbit team invested money from their own pockets to buy the parts we were missing and to make sure everything was ready on time.
We are very proud of our team, and I would like to take this opportunity to thank them. If we are here today it is thanks to them.
Another important element is to surround oneself with experts who can help the company; they can be either senior people in the team or advisors. Non-optimised processes lead to higher internal costs or heavy workloads for people, and in the long run this turns into demotivation.
The perfect company does not exist. But if you ignore internal, organisational, communication, and process problems when you are small, correcting them when you are big becomes more difficult.
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For more info on D-Orbit, visit: https://www.dorbit.space/