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Yoel Gat is on his way to issuing another satellite company in Tel Aviv, SatixFy, which will soon raise NIS 325 million at a value of NIS 1.4 billion. The company is developing a number of products that use the newer technologies in the industry that are in the infiltration stages and replace the old ones in some uses. Stickspay’s backlog is estimated at $ 17.5 million.
Stickspay will arrive at the IPO with an estimated annual revenue in 2020 of about $ 10 million, but the company is proud that before the corona, a more representative period, they said, showed 50% growth with revenues of $ 30 million. 83% of the revenue came at the time from communication chip development services, and the remaining 17% came from the sale of equipment to end users. In the same year, the company recorded a net loss of about $ 7 million. In the first half of 2020 the loss was $ 8.2 million on revenue of $ 5.4 million, reflecting a loss rate of $ 16 million per year.
Before explaining Stickspay’s products, one must first understand its operating environment: geostationary satellites orbiting the Earth at an altitude of about 36,000 km, those used in the field of communications are increasingly being replaced by certain sectors in satellites orbiting the globe at lower altitudes (LEO at low altitudes MEO for medium height) Although the latter two have a shorter lifespan, their costs, shipping to space for example, are cheaper.
The transition to this technology also requires the adaptation of the ecosystem, ie the devices that communicate with the satellites. These include chips in the satellites themselves and antennas that fail to track fast enough and maintain coverage as these new satellites replace each other in their motion.
Also, today in many appliances are embedded Internet of Things (IoT) technologies, i.e. they are linked to each other (M2M – Machine to Machine). But not everywhere do they have a wired or wireless internet connection to transmit or receive information, and see for example oil and gas drilling rigs and vessels. LEOs are used for this purpose, but here too there is a trend of moving to new frequencies (Ku and Ka) that allow for wider traffic and better coverage and this also requires adjustments on the infrastructure side. Stickspay seeks to meet this need.
Another relevant market for Sticksfei is In Flight Connectivity (IFC), which means connecting to a Wi-Fi network on commercial and private flights. In order to enable wider data traffic of gigabytes per second (as is possible today in Israel, for example, fiber optics, one of the goals is to stream high-quality video to passengers) in a way that will reduce costs, the existing technological infrastructure in aircraft must be adapted.
So what exactly is the size of the market we are talking about? According to research firm EuroConsult, which Stickspay quotes, there is currently a potential of $ 1.5-2 billion a year for equipment for LEO satellites themselves (about 300 launches each year). Unsurprisingly, it seems to be a fairly centralized market, and according to Stickspay, it has four players. One of them is OneWeb, a customer of the company that last year faced bankruptcy from a shirt by the British government and an Indian concern that invested a billion dollars in it. OneWeb’s communications satellites will be fully operational next year. The other three players are Elon Musk’s SpaceX StarLink (launch 12,000 satellites), Amazon (3,000) and Telsat (300).
For end equipment for users by about $ 5-6 billion by 2028, then the last segment will double itself fivefold. As for the potential market in the aviation sector (commercial and private), where Stickspay is talking about about 2.5-3 billion dollars in the years until 2029. Regarding the device connectivity market (M2M) in Stickspay did not specify amounts, but it is stated that NSR estimates by 2023 will be about 5.8 A million connected devices using satellite communications systems worldwide.
And now for the products: Stickspay is developing silicone chips that are considered efficient in terms of energy consumption and thus reduce operating costs in the devices in which they are installed. The first generation of the product is already on the market, named SX-3000, and now the company is working on the new generation, SX-3099, the development of which will be completed at the end of May.
An even newer generation, the SX-4000 is in the planning stages and its marketing is planned for the first quarter of 2022. Airbus has invested $ 14 million in the development of the SX-4000 with an additional investment of $ 3 million to develop software specific to its needs. Airbus is also negotiating a purchase agreement for first chips. These chips can also be installed in systems that it has not developed Stickspay itself. In this market of silicon chip-based modems, Stickspay has one competitor and is also the market leader: EASY IIC from France. As a negative factor on Stispfey’s competitive position.
In addition, Stickspay develops complete antennas as well as two types of chips for antennas for LEO transmission receivers, as well as terminal equipment for operators such as TV broadcast networks and Internet networks or for receiving IoT transmissions from connected devices. Other products are the Internet connection systems on planes as well as communication recorders, which are the satellite component that picks up the transmission coming out of the transmitter on the ground.
In addition to OneWeb, the company has two other customers: Jet Talk, of which the Singapore-based STE is a partner, which develops and markets satellite communications antennas for the civil aviation market and iDirect, also of STE. The company reported advanced negotiations with a LEO satellite operator for the sale of communications modems to the terrestrial sector. The company estimates that the agreement is expected to be signed during the first half of 2021 and its scope is estimated at $ 30 million. An initial agreement to immediately launch the contract was $ 4 million.
It will be said that Stispfey does not manufacture the chips itself, and relies like many others on the few chipmakers in the world. This area has been experiencing a shake-up in recent times in the shadow of growing demand for markets, which the pace of production is failing to catch up with. Stiskfey manufactures at giants such as ARM and TSMC and states that the production volumes required for it are not at a level that will affect the manufacturers, which means that it will not have a problem reserving some of the production lines for it.
Gilat Hall in the headlines, but she has not been associated with the founder of Gat for about 17 years, since she came to a stay of proceedings and signed a creditors’ settlement with Eliezer Fishman,
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. Gat also has another creditors’ settlement, this time with real estate company Ilan-Gat, which has accumulated debts of about NIS 150 million. Gats founded Stickspay in 2012, and now the question is whether investors will tell themselves that the latter has returned to ” Forte “and will be impressed by the technology, or they will be put off by the spots on the resume.