SpaceX to acquire small satellite startup Swarm Technologies

Elon Musk’s SpaceX is acquiring the small-satellite data provider Swarm Technologies, scooping up the startup’s roughly 30 employees and its network of 120 tiny satellites. The deal, struck last month, is extremely rare for SpaceX, which normally manufactures its rocket and satellite hardware in-house or hires subcontractors.

Swarm revealed the acquisition plans in an August 6th filing with the Federal Communications Commission that requested approval to shift ownership of its satellite and antenna licenses to SpaceX. The merger agreement, in which Swarm will become a direct and wholly owned subsidiary of SpaceX, was inked on July 16th, the filing said.

The acquisition of Swarm marks a rare business maneuver for SpaceX as it deepens its foray into the world of consumer electronics and claws its way out of a chasm of unprofitability with Starlink, with the hopes of eventually turning the network into a cash cow to fund Musk’s massive Starship launch system. It’s unclear, though, what specific opportunity SpaceX sees in Swarm to benefit its broadband network. A spokesperson for Swarm declined to comment on the deal, and SpaceX didn’t reply to a request for comment.

The acquisition will strengthen “the combined companies’ ability to provide innovative satellite services that reach unserved and underserved parts of the world,” Swarm wrote in the FCC filing. “SpaceX will similarly benefit from access to the intellectual property and expertise developed by the Swarm team, as well as from adding this resourceful and effective team to SpaceX.”

Founded in 2016, Swarm offers ultra low-bandwidth data services using its tiny sandwich-sized SpaceBEE satellites that talk to smaller consumer antennas on the ground called “Tiles.” Of the 150 planned, 120 satellites are already in orbit, and the tiles can be installed as cracker-sized chips inside, for example, the circuit board of a device. With GPS built in, devices with a tile installed can be tracked, relay sensor data, or do whatever the customer programs it to do using tiny pings of bandwidth to Swarm’s global satellite network starting at $5 a month.

SpaceX’s much different Starlink program aims to beam broadband internet into rural areas that lack fiber or physical internet connections. The company already has more than 1,700 of its initial tranche of 4,409 satellites in low-Earth orbit with nearly 100,000 beta users, most of whom paid $499 for a terminal kit and $99 a month for internet. The network is far ahead of competition from UK-backed OneWeb, which has launched 254 satellites so far for its similar — but smaller-sized — broadband network, and Amazon’s budding Kuiper network, which has yet to deploy any satellites.