Investment Memos
May 10, 2020
Puneeth Meruva

Providing Positioning for the Age of Autonomy (Why we invested in Xona Space Systems)

We are asking more of our vehicles now — for safety, convenience and carbon-reduction purposes. But we still haven’t outfitted cars with the tools they need to perform these higher level functions. Chief among the underdeveloped skills of a car is better positioning. Cars know ‘mostly’ where they are in 2D space on a map, but that’s not good enough. They need to know exactly where they are in a secure and reliable manner.

While conducting internal research years ago regarding new space-based tracking and positioning ideas, we noticed a trend we believed would have significant implications for the future of transportation: the rise of small, low-cost cube-shaped satellites (CubeSats). It’s becoming cheaper than ever to launch the nodes of a positioning network into orbit, which means that there is potential for tracking at a breakthrough cost model. After a year of searching for a company built on these tailwinds, we met Brian Manning, Tyler Reid, and the rest of the team at Xona Space Systems.

From the company: “Xona is building a modern global Position, Navigation and Timing (PNT) service that will provide the security, availability, and accuracy needed to support the age of autonomy. Our Pulsar™ service will offer ten times better accuracy than standard GNSS through its patent pending powerful and encrypted signal with rapid convergence times.”

Augmenting Existing GNSS to Provide Positioning and Navigation for the Age of Autonomy

Developed 50 years ago in the US, the original GPS constellation cost $12 billion to put into orbit and requires $750 million per year to operate. Since then Russia, China, and the EU have all built independent satellite navigation systems largely modeled after GPS. Despite this time and investment, existing GNSS (Global Navigation Satellite System — a general term describing all global satellite positioning systems) services provided by the legacy systems are severely limited. While GNSS is one of the only systems that can operate in remote environments and through poor weather, it lacks the accuracy, signal strength, and security needed to support many modern technologies — especially in remote environments, roads experiencing poor weather, or urban canyons.

Xona solves these pain points by augmenting existing GNSS, acting essentially as a global firewall, correction service, and booster. They are developing and launching their own constellation of CubeSats into low earth orbit, which will pick up existing GNSS signals, then process, strengthen, encrypt, and modify the signals in order to provide new secure GNSS signals with centimeter-level accuracy and significantly higher resilience.

GPS Services provided by Xona’s Pulsar™ Service

Other than legacy GNSS, Xona’s main competitors are substitute products — either correction services or advanced receivers and processors. Correction services are wholly dependent on the fragile GNSS signals for operation, and thus naturally tend to suffer from many of the same vulnerabilities such as loss of signal lock from either environmental or intentional disruptions. Advanced receivers and processors, on the other hand, tend to be more complementary than competitive.

Key Risks for Xona

Xona’s first major risk lies in the cost of launching a constellation with sufficient world-wide coverage for transportation use-cases. Xona is mitigating this risk by targeting adjacent applications in the beginning (military contracts, weather and forecasting, etc.).

Their second major risk is that GPS receivers need to be modified and deeply integrated into the positioning product offerings of their partners, meaning that they will potentially encounter longer sales-cycles. However, these modifications are fairly simple and of similar complexity to those required when GPS receivers were updated to receive European or Chinese GNSS signals in addition to North American signals.

Xona’s team is ‘a group of space ninjas, engineers, GPS nerds, motorcycle racers, and adventurers.’

The founders met while conducting research at the Stanford GPS Lab and the Space Systems Development Lab. CEO Brian Manning then went on to develop space and automotive systems at SpaceX and PSI, respectively, while CTO Tyler Reid researched GPS and other positioning systems as an Autonomous Driving Researcher at Ford Motor Company.

We invested in Xona’s $1 million pre-seed round, alongside lead investor 1517, Seraphim Capital, and Stellar Solutions. They are currently conducting ground-based testing that will aid the development of their first flight units.

We firmly believe that Xona Space Systems is a moonshot investment for us. Trucks is very excited to support the team and help them build the next generation of positioning services that can provide the security, availability, and accuracy needed to support the coming age of autonomy.

Read more about Xona Space Systems.

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