Aiming For the Stars: Google’s Acquisition of Skybox Imaging

Skybox Imaging was acquired by Google last month for $500 million. This purchase ranks as the 10^th largest by disclosed deal amount in Google’s history and is a very important acquisition. Skybox, which is based out of Mountain View, CA, has developed a micro-satellite capable of taking highly detailed images of the earth’s surface. They were venture-backed having received a total of $91 million in VC funding from notable firms including Khosla Ventures, Canaan Partners, Northwest Venture Partners and Bessemer Venture Partners. Skybox builds their satellites with off the shelf components, including some traditionally used in the automotive industry. This innovative approach has allowed them to build satellites which are 20x smaller than traditional imaging satellites; at a significantly lower price point. Building smaller satellites not only saves on component cost, it greatly reduces the price to launch an individual satellite (traditional imaging satellites cost upwards of $1 billion to build and launch). The smaller footprint of these satellites will allow Skybox to deploy their initial constellation of units much quicker than traditional satellite imaging companies have been capable of in the past. Skybox deployed their first satellite in November of this past year, and currently has 13 more under construction. It’s quite likely that these plans will be ramped up significantly given Google’s massive cash hoard and ambitious plans for the technology.

Despite Planet Labs currently having the advantage as far as number of currently deployed satellites goes, Skybox holds significant advantages in key areas over its competitors. BlackBridge currently has the oldest fleet, which is clearly shown by the lower resolution and slower scan rate of their satellites. Planet Labs will be able to image the Earth’s surface just as frequently as Skybox, although at a lower resolution. The biggest area where Skybox opens up a significant lead is in the ability of their satellites to capture 90 second HD video clips. This opens up an entire new set of data and analytics possibilities which current still-image satellites do not offer.

In the near term the obvious benefit to Google will be Skybox’s ability to provide much more up to date images of the earth for Google Maps and Google Earth. Currently, the image data in these products is on average between 1 and 3 years old. Google does provide limited near real-time imagery from NASA, taken by their MODIS Terra satellite. The major downside is that the resolution of this satellite is 250m per pixel, making it 250x less accurate than Skybox’s offering; severely limiting its usefulness. Although helpful in a general way, the ability to provide much more up to date and detailed images will greatly expand the value of these products for a number of industries not currently served by Google’s existing offerings. Skybox currently targets a number of industries in need of up to date image/video data including agriculture, emergency response, oil, mining and insurance organizations, amongst others.

As impressive as Skybox’s satellite hardware is, it is the combination of this imaging data with their proprietary software which will change the shape of countless industries. The commodities industry in particular is facing a potential disruption with the availability of near real-time high-resolution imaging data. Commodity traders will now be able to monitor oil terminals (and other resource stocks) across the world, potentially leading to a situation of near-perfect information availability for financial markets.

Surface mining is another industry where the availability of Skybox data can have an important impact. Businesses will now be able to track daily activity, traffic to and from and the mine and size of on-site stockpiles at locations across the globe. The implications of this are vast but include being able to track possible upcoming shortages in certain materials based on aggregating the activity of various mineral mines across the globe. Although not necessarily obvious to the casual observer, Skybox’s technology stands to disrupt an untold number of industries in a very short matter of time.

My personal hope is that they will contribute some of the data philanthropically to organizations such as the Roundtable on Sustainable Palm Oil (RSPO) or other organizations which can greatly benefit from timely data on land-use and deforestation. Many commentators remarked how technology such as that of Skybox or Planet Labs could have helped with the rapid location of the missing Malaysian plane this past Spring. With the ability to greatly increase the effectiveness of disaster monitoring and coordination of first responders it’s not out of the question to imagine an entire humanitarian “Superhero” division being built around the acquired technologies. Google itself has alluded to some of these potential uses saying in a recent statement “Over time, we also hope that Skybox’s team and technology will be able to help improve Internet access and disaster relief”.

This statement also hints at Skybox’s ability to significantly contribute to Google’s Project Loon; their effort to spread internet coverage across the globe. To date Google has been focusing its efforts in developing high-altitude balloons to accomplish this task. The balloons would be relatively stationary and provide internet service to rural or developing areas, places where laying a traditional broadband line would be prohibitively expensive. Although in its early stages (having begun in the summer of 2013) Google seems to have started hedging its bets on the balloons with the addition of alternative technologies capable of fulfilling the Loon mission. In April the company bought Titan Aerospace, a developer of high-altitude renewably powered drones. Although its intentions are hard to glean, and it’s quite possible Google hasn’t fully developed them, it seems extremely likely that this medley of technologies will work together or be integrated into a singular platform capable of fulfilling Project Loon’s goal.

This deal is a successful exit for Skybox’s venture backers, and along with a record $6 billion invested globally in cleantech through the first half of the year, represents the industry’s staying power and willingness of investors to fund game-changing companies. As global awareness and acceptance of the need to start significantly addressing climate change continues to grow, it is through technology breakthroughs and disruptive innovations such as Skybox’s which will help companies and nations undertake that monumental task.