Elon Musk’s SpaceX is buying a satellite internet startup in a move to bolster its own Starlink internet business, according to regulatory filings.
SpaceX company plans to buy Mountain View, Calif.-based Swarm Technologies, the companies said in a filing with the Federal Communications Commission on Friday.
Swarm’s business model centers around launching small, relatively cheap satellites into orbit that provide internet access to Earthbound customers. The company has 30 employees and has launched 120 satellites satellites so far, according to the Verge.
Musk’s SpaceX runs a similar satellite internet service called Starlink and has launched 1,700 satellites so far. It will absorb Swarm’s satellite and ground station FCC licenses, becoming a fully owned subsidiary of Musk’s company.
In the filing, the companies argued that the FCC should approve the deal because it would strengthen the companies’ “ability to provide innovative satellite services that reach unserved and underserved parts of the world.”
“Swarm’s services will benefit from the better capitalization and access to resources available to SpaceX, as well as the synergies associated with acquisition by a provider of satellite design, manufacture, and launch services,” SpaceX and Swarm said. “SpaceX will similarly benefit from access to the intellectual property and expertise developed by the Swarm team, as well as from adding this resourceful and effective team to SpaceX.”
The companies did not disclose the value or detailed terms of the deal in the filing and did not immediately reply to a request for comment.
Swarm — which has raised $27 million from backers like Craft Ventures and Social Capital — was founded in 2016 by former engineers from Google, Apple and NASA.
The company drew the FCC’s condemnation and paid a $900,000 settlement in 2018 for launching four satellites without regulatory approval, SpaceNews reported.
Under the terms of the settlement, the company was subject to enhanced FCC oversight and agreed to give the regulator pre-launch notices for three years.
Other satellite companies feared at the time that Swarm’s move would lead to heightened regulation of the industry, the outlet reported.
For its part, SpaceX counts the US government among its largest clients. The company has several launch contracts with the Pentagon and last month was awarded a $178 million NASA contract to launch the agency’s first mission focusing on Jupiter’s icy moon Europa.
SpaceX and Swarm first agreed to merge on July 16, according to the filing.