SpaceX just made its first acquisition…

We’ll wrap up today with a curious move from SpaceX. It just acquired a satellite connectivity company called Swarm Technologies for an undisclosed amount. This is the first acquisition SpaceX has ever made in its nearly two-decade history.  

Swarm is a Silicon Valley company that has a constellation of 120 satellites connected to a ground station network. The ground stations are in constant communication with the satellites. But these aren’t normal satellites. They are microsatellites about the size of an iPhone.

And Swarm has developed “Swarm Tiles” that can be embedded in items on Earth to connect them to the satellite network. These tiles can be used to track cargo around the world. They can be embedded in equipment, meters, and other devices to track system performance.

And that’s just scratching the surface. Swarm Technologies envisions all kinds of applications for this technology across the agriculture, energy, and transportation industries.So we can see how SpaceX could incorporate this into its existing business. And I think there’s an even bigger motive driving this acquisition as well.  

Swarm Technologies has already secured licenses around the world for its ground stations and satellites. These licenses could be tremendously valuable to SpaceX’s Starlink network. Remember, SpaceX plans to make Starlink a global backhaul network for space. It will allow satellites to communicate with base stations on Earth 24 hours a day. And Starlink’s goal is to blanket the Earth with a minimum of 12,000 satellites. 

This will require regulatory approval in many different jurisdictions. Having those licenses already in place could accelerate the deployment of the Starlink network.  So I think SpaceX sees this as an opportunity to both create a supplemental revenue stream and to speed up its plans for Starlink. And this comes as SpaceX is gearing up to spin out Starlink into its own standalone company.   I’m confident that Starlink is no more than 12–18 months away from its own initial public offering (IPO). This will be an exciting company.