[Interview] James Kilpatrick, Chair, Gravitilab, UK
Gravitilab is a "Space as a Service" business providing research, testing and qualification facilities to space agencies, government, academia and commercial enterprises. The company’s Chair and Chief Finance Officer James Kilpatrick explains.
Tell us about Gravitilab?
Gravitilab is a Spacetech business that is unlocking access to microgravity and Space environments
When was your company founded?
The company was incorporated 10/4/2018 but became Gravitilab Aerospace Services on 15/09/2022
Who are the founders?
James Kilpatrick Chair & CFO and Rob Adlard CEO & CTO
What is the professional background of the founders?
James Kilpatrick is a Serial Entrepreneur in tech-driven service businesses. He has been a director of several early stage businesses including Opta Sports Data, ILG Digital, and KFS Group. His background is in Finance, Operations and Marketing and his experience has included managing multiple exits through trade and private equity sales. He is responsible for Investment, Finance, and Corporate Strategy
Rob Adlard is a visionary, Space evangelist and technical lead. He has studied Astronautics and Space Engineering at postgraduate level and at Gravitilab he leads on technical development and customer outreach as well as representing us within the Space industry. He is currently Chair of the UK Space Launch Committee.
Who are the owners of Gravitilab?
The company is owned by the Founders, senior management, and private investors including family office and the British Design Fund. James Kilpatrick is the largest shareholder with around 20%.
How is Gravitilab financed?
Gravitilab has raised more than £2.1million of equity funding to date under SEIS and EIS. This funding has come from Founders, Angel investors and recently Family Offices and small VC Funds. It has also secured more than £500k in grant funding including from the UK Space Agency and the European Space Agency.
In 2023, Gravitilab is seeking up to £5.0mil of equity funding as late Seed / Series A investment offering an initial close within this tax year. It is also pursuing more than £2.5mil of additional grant funding including from Innovate UK.
What industry does Gravitilab operate in?
Space Technology Services. Gravitilab is disrupting the existing institutional market for research, development and testing in microgravity and Space environments. More importantly it is unlocking the supply chain for untapped sources of new demand across multiple industries. It operates at the heart of the UK’s science and innovation strategy
What are – in your opinion – the dynamics of the Space Technology?
The Space economy is growing rapidly, driven largely by the advent of private capital. Old institutional programmes are being displaced by commercial enterprises led by entrepreneurs like Elon Musk, Richard Branson and Jeff Bezos. New technology, such as Gravitilab’s UAS and its hybrid propulsion systems are displacing legacy technology but also making the market more accessible to new customers.
Specifically by providing access to microgravity and Space environments for research and testing, Gravitilab is enabling development and manufacturing that simply isn’t possible on earth where gravity impacts on all activity.
Why did you start your Gravitilab? What opportunities did you see?
I saw an enormous and fast growing market being disrupted by new technology. Within this broader market, I saw specific opportunities to address the global shortage of R&D and testing facilities, especially for microgravity and Space environments. This is already a $2bn market but by making it more accessible (significantly more affordable, more local and shorter lead times) it would open to a much larger customer base with the potential for exponential growth.
Specifically, Gravitilab is targeting the intersection of the $25bn Space launch services market and the £65bn UK R&D market. Both are being fuelled by private capital and both are being leveraged by governments that see science and technology as the ‘cure’ for inadequate improvements in economic productivity.
Looking at the existing institutional market for R&D in Space and combining that with the existing Space related tech development activity, the addressable market already extends to $2.5bn. With its unique technological advantage and no direct competition, Gravitilab sees an obtainable market for itself of at least $250mil.
What problems does Gravitilab solve?
In a word: “Gravity”.
While gravity has an unwelcome impact on scientific research, it is increasingly compromising commercial research and testing across a huge range of sectors from cosmetics, to food, to semiconductors. Furthermore, with 90% of climate data originating in Space, the challenges of accessing Space are delaying the fight against climate change.
The dearth of suitable testing services is giving rise to high failure rates for equipment that is deployed in Space, including some classes of small satellites where as many as half fail to function in orbit; and it is delaying the qualification of innovative products from other industries that could add value in Space.
Governments around the world are increasingly recognising the value of technology and innovation, and indeed the UK government is leading the crusade for mandatory qualification of Space products and systems in order to prevent the build up of Space debris.
What are the USPs of your Gravitilab?
Specifically in terms of Gravitilab’s technology, we have patent protection on our unique UAS or drone called LOUIS which can create short duration microgravity in a drop pod at relatively low altitudes. We are also building a revolutionary hybrid powered suborbital rocket called ISAAC which can offer longer periods of microgravity AND exposure to a real Space environment. Pleasingly, we also ensure that sustainability is at the heart of our services with our suborbital rocket emitting 75% less greenhouse gas equivalents per launch; and in time we expect to have a zero emission rocket propulsion system.
More generally, our services are far more affordable than alternatives with savings of as much as 75%. We can also cut lead times from 3 years to a couple of months and we provide our services locally to customers rather than requiring them to travel overseas. We also believe we are the only company in the UK to meet all the current pillars and strategic objectives of the UK Government Space Policy.
Who are your customers? (you may describe them in general terms of target groups of customers/industries or mention companies specifically by name)
Gravitilab has a qualified pipeline of more than 20 customers that amounts to more than £2.1mil of potential revenue, and an unqualified pipeline of a further £3mil.
Gravitilab has identified 30 different customer groups that could utilise its services including Space Agencies, Universities, Pharmaceuticals, Life Scientists, Spacetech, Engineers, Industrial Materials, Physical Scientists, Research Bodies, Defence Primes, Launch Brokers, Precision Testers, Robotics, Governments, Communications and Environmentalists.
What does your company need in order to grow?
In a word: “Capital”.
The company is at an inflexion point as it emerges from 4 years of development and begins to roll out its commercial services. The UAS service will go into production mode in Q2 2023, but the suborbital rocket service requires one more year of development spending.
In 2023 Gravitilab is seeking up to £5.0mil of equity funding as late Seed / Series A investment offering an initial close within this tax year. It is also pursuing more than £2.5mil of additional Grant funding including from Innovate UK.
What is your Gravitilab strategy?
We have begun soliciting customers over the last six months for our as yet unlaunched services. The UAS service will be available from Q2 this year and we expect final testing of the suborbital rocket services to take place in H1 2024. However this should generate revenue this year as customers are expressing a wish to pay to fly payloads on test launches. We are also in discussions to make our technology available to third parties under licence.
We have secured premises near Norwich in the East of England which will match our capacity requirements for the next two years with the potential to expand further on site, whilst keeping the option open for satellite operations elsewhere in the UK and overseas.
Staffing to date has focused on engineering and technology but increasingly the focus will shift to commercial and operational support. Space is a global industry and we have already attracted 8 nationalities to our team of just over 20 people.
The company expects to turn cash flow break even in FY25 with monthly operating surpluses from Jan 2025. Principal engineering costs are largely fixed, and manufacturing costs are relatively low, so operational gearing is very high contributing to rapid EBITDA growth from FY26.
In which markets are you looking to establish your presence?
Our primary focus is on building out our operations in the UK, but in contrast with other providers for R&D facilities, we can take our facility to the clients so will retain the ability to operate across the world. That said, in terms of rocket launch activity, we will have to utilise suitable launch sites which do not exist near large population centres. In this regard we have already passed the first CAA gateway to establish our own launch site off the East Anglian coast, but we are likely to utilise sites in Scotland and America for much of our activity. Our potential client list includes NASA which would require us to have an entity operating in the USA.
What are your plans for the coming 12 months?
We are working on a number of technical milestones which will be facilitated by our new rocket engine test facility which in turn will pave the way for some commercial testing of the ISAAC suborbital rocket before the end of the year. Gravitilab is also launching its commercial microgravity services using its unique drop pod system during the summer. Alongside these technical and commercial goals we will be seeking additional funding, both equity and grant, which should see us through to cash flow breakeven in 2 years time.
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