Capella Space launches defense-focused subsidiary as demand for satellite imagery soars

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Satellite imagery startup Capella Space is establishing a subsidiary aimed at serving U.S. government customers, as it seeks to fulfill growing demand from intelligence and defense organizations for its synthetic aperture radar tech.

Capella is no stranger to working with the government. The company was founded almost seven years ago, and in that time it has seen a huge response from government customers, CEO Payam Banazadeh said in a recent interview with TechCrunch.

“What we found out is that there’s a huge demand for what we’ve already built on the government side and we actually have a very, almost perfectly aligned product market fit in the government sector,” he said. More recently, he added that Russia’s war with Ukraine has highlighted the utility of synthetic aperture radar in particular, which can capture images even in adverse weather and light conditions.

The new subsidiary, Capella Federal, intends to cater to some of the government’s specialized requirements related to security and confidentiality. It will focus on existing products at first — the data and analytics — using Capella’s existing satellites in orbit, which are already serving government customers. But on a longer timeline, Banazadeh said the company plans to potentially modify its existing data products and satellites based on feedback it gets from customers.

“We see significant demand on potentially operating satellites on behalf of the government or potentially even providing those satellites as a product themselves,” he said.

Capella Federal will be headed by Eric Traupe, a retired United States Marine Infantry Officer who was previously a former assistant director of the CIA. Clayton Hutmacher, former operations director in the U.S. Special Operations Command, will serve as chairman of the Capella Federal Board. The company also added Robert P. Ashley Jr., former director of the Defense Intelligence Agency (DIA), to its existing government advisory board.

Capella is not the only space company to establish a subsidiary or business segment aimed at government; in recent weeks, SpaceX quietly announced the launch of Starshield, and Rocket Lab set up Rocket Lab National Security LLC for defense-related work.

Working with the government is simply good business sense for space companies, Banazadeh said.

“You can’t be a space company without having government as a big customer of yours,” he said. “One, it’s too big of an opportunity and too big of a problem set to ignore and two, some of the problems that they’re dealing with, especially now, space is a very important tool to solve those problems. So I don’t think you can be a sustainable space company and not have a strong line of business into the government.”

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