Startup

Boeing’s Satellite Breaks Apart in Space: What Went Wrong and What’s Next?

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1 week ago

October 30, 2024

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On October 19, 2024, Boeing’s Intelsat 33e, a high-stakes communication satellite, abruptly failed and broke apart while in geostationary orbit, 35,000 kilometers above Earth. Known as a part of the EpicNG series, this satellite was launched in August 2016 with the ambitious goal of providing broadband and broadcasting services to under-connected regions in Europe, Africa, and the Asia-Pacific. Although designed to serve for a full 15 years, Intelsat 33e barely reached the halfway mark, breaking up into over 20 debris fragments tracked by the U.S. Space Force. This unplanned disintegration has set off a wave of questions about what could have led to such a significant failure.

The causes behind this unexpected incident remain unconfirmed, but experts are examining various scenarios, including structural malfunctions, undetected mechanical issues, increased solar activity, a possible micrometeoroid impact, or even a collision with space debris. This isn’t Intelsat 33e’s first issue in space—it was delayed in reaching its original orbit and had propulsion issues that forced it to consume more fuel than planned, leaving it with a shorter lifespan than expected. With the satellite now out of commission and, notably, uninsured, the financial impact on both Boeing and Intelsat will be substantial. For Intelsat, this is a particularly hard hit, as the EpicNG series was a major step forward in improving global connectivity.

The Space Junk Dilemma: A Growing Hazard in Earth’s Orbit

The satellite’s breakup has added to the growing problem of space debris, an issue that has become a pressing concern as Earth’s orbit becomes increasingly cluttered. According to the European Space Agency (ESA), over 40,000 fragments larger than 10 cm and millions of smaller particles are currently orbiting Earth. This debris, which collectively weighs about 4,300 tonnes, poses a significant risk to operational satellites and space missions. Jonathan McDowell from the Harvard-Smithsonian Center for Astrophysics emphasised that the latest incident underscores the necessity for better monitoring and debris management strategies in space.

Unlike low Earth orbit (LEO), where decommissioned satellites can often be steered to burn up in Earth’s atmosphere, geostationary orbit poses unique challenges. The 35,000-kilometer altitude, where the Intelsat 33e was stationed, is often too high for objects to be safely deorbited without additional propulsion. Debris in this orbit tends to stay for decades or even centuries, raising the risk of collisions that could produce even more fragments in what’s known as the Kessler syndrome—a cascading effect where debris from one collision triggers more and more collisions, eventually making certain orbital regions unusable.

Why This Matters: Industry Accountability and Regulatory Ramifications

For Boeing, this incident adds to an already challenging year. The aerospace giant has faced ongoing issues with its aircraft manufacturing division, delays in its Starliner spacecraft program, and now the high-profile failure of Intelsat 33e. Each incident raises concerns about quality control, design reliability, and corporate accountability, which could impact Boeing’s future contracts and reputation. For instance, Boeing’s prior satellite, Intelsat 29e, also suffered a catastrophic failure in 2019, and industry analysts speculate that further scrutiny could lead to stricter regulations on satellite manufacturing and more stringent operating standards for space-based infrastructure.

The loss of Intelsat 33e may prompt other satellite manufacturers and operators to reconsider their approach to satellite durability, fail-safes, and overall mission planning. As the satellite industry continues to grow, companies are under increasing pressure to avoid contributing to the already overwhelming accumulation of space debris. In recent years, entities like the U.S. Federal Communications Commission (FCC) and international space regulatory bodies have explored fines and operational restrictions on companies responsible for space debris, with a notable fine issued in 2023—the first of its kind. Whether or not Intelsat or Boeing will face similar fines or restrictions is yet to be determined, but the incident is likely to spark more conversations around space sustainability and corporate responsibility in orbit.

The Bigger Picture: Future Implications for Space Missions and Sustainability

This Boeing satellite failure offers a stark reminder of the complexities and risks associated with space operations. Each failed mission or satellite breakup adds not just operational costs but also environmental hazards in the form of space debris. The ESA, NASA, and other space agencies are investing in research to track and potentially clear space debris, exploring technologies like robotic arms, nets, and even harpoons designed to “capture” defunct satellites and bring them down safely.

As space commercialisation accelerates—with mega-constellations like Starlink and Kuiper planning thousands of new satellite launches—these technologies are becoming essential to preserve the viability of Earth’s orbits. The 2024 Intelsat 33e incident exemplifies the importance of preemptive measures and the need for more stringent standards to govern the rapidly expanding space economy. Looking ahead, companies must prioritise sustainability in their designs and operations, both to prevent debris and to protect the operational assets in space.

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Startup

Swiggy IPO: Retail portion subscribed 84%, overall 35% shares allotted

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18 mins ago

November 7, 2024

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Food delivery and quick commerce platform Swiggy’s Initial Public Offering (IPO) was subscribed only 35% on the second day of bidding as broader market indices slipped in red.

Sriharsha Majety-led Swiggy witnessed the quota reserved for employees being subscribed 1.15 times by the end of bidding on the second day. Retail investors subscribed to 84% of the shares.

According to data from the Bombay Stock Exchange (BSE), non-institutional investors purchased 14% of their allocated shares, and qualified institutional buyers’ (QIBs) part was booked at 28%.

As of the second day, Swiggy’s IPO received bids for 5.57 crore shares, amounting to 35% of the total issue size. The issue was subscribed 12% on day one.

Swiggy, which is set to list on Indian stock markets on November 13, initially aimed for a valuation of approximately $15 billion, but later updated its RHP to seek a valuation of around Rs 87,000 crore or about $11.3 billion at the upper price band.

“Swiggy’s decision to lower its valuation leaves some upside room for the investors, we still recommend an AVOID recommendation to this issue due to the “reported negative” cash flows and ongoing losses, alongside a slightly high valuation of 7.7x FY24 price-to-sales,” noted Aditya Birla Money in a research report dated Nov 4.

It raised nearly Rs 5,085 crore (about $605 million) from anchor investors, which included life insurance and mutual fund arms of HDFC, ICICI, and SBI. The anchor book, which witnessed participation from over 75 key domestic mutual funds, also saw bids from global mutual fund investors like Astrone Capital, Fidelity, and Blackrock.

Swiggy plans to raise close to Rs 11,700 crore in its IPO which will include fresh issue of 11.54 crore equity shares along with an offer for sale (OFS) of 17.51 crore equity share by existing stakeholders. It has set IPO price band at Rs 371- Rs 390.

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Startup

Northern Arc secures $65M debt commitment for maiden climate fund

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1 hour ago

November 7, 2024

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Northern Arc has raised $65 million in debt commitments for its maiden Climate Fund, through its fund management arm, Northern Arc Investments IFSC Trust.

The debt commitments include $50 million from the United States International Development Finance Corp (DFC) and $15 million from the official Development Bank of the Republic of Austria, OeEB, it said in a statement on Thursday.

The non-banking financial institution’s (NBFC) fund aims to address critical funding gaps of growth stage startups in the solar energy, e-mobility, sustainable agriculture, and circular economy spaces.

“The significant investment from DFC and OeEB reinforces our ongoing commitment to revolutionise climate finance and transform the financial landscape for all households and businesses in India. By channelling these funds into green projects across our focus sectors of MSME, affordable housing, vehicle finance, agriculture finance, microfinance, and consumer finance, we aim to create a cascading effect that promotes sustainable development,” said Ashish Mehrotra, Managing Director and CEO, Northern Arc.

In October, the company launched its performing credit AIF fund (Category II), ‘Finserv Fund’, through its subsidiary Northern Arc Investment Managers (NAIM).

The fund aims to raise a target corpus of Rs 1,500 crore, including a greenshoe option of Rs 500 crore.

Northern Arc has assets under management (AUM) worth Rs 15,121 crore through its balance sheets and active AIF funds, as of September 30. It is backed by investors such as Sumitomo Mitsui Banking Corporation, LeapFrog, and 360 ONE, among others.

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PhysicsWallah’s losses widen FY24 as rising expenses overshadow 2.6X revenue growth

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2 hours ago

November 7, 2024

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Edtech unicorn PhysicsWallah (PW) saw its losses widen significantly in FY 2023-24, fueled by a sharp rise in employee benefit costs and other expenditures, casting a shadow over a 2.6-fold increase in operating revenue.

The Noida-based company also revised its FY 2022-23 figures, now reporting a loss of Rs 84.1 crore, in contrast to the Rs 8.9 crore profit previously stated in its earlier consolidated financial statements.

The heavy losses come on the back of the edtech company’s rapid expansion over the past couple of years. PW, which initially focused on the test-prep segment, has rapidly diversified its educational offerings over the past few years to encompass everything—from school education to skills training—casting its learning net over a wide base of learners.

PW’s rapid expansion comes amid a turbulent period for BYJU’S, once the leading edtech platform and the poster child of the Indian startup ecosystem.

The Alakh Pandey-led firm reported a consolidated loss of Rs 1,131.3 crore in FY24, up 13.5X from Rs 84.1 crore recorded in the earlier fiscal period.

The reported losses were impacted by non-cash adjustments, such as Compulsorily Convertible Preference Shares (CCPS) amounting to Rs 756 crore, according to the company. This CCPS expense is recorded in relation to the buyback clause provided in the issued CCPS, based on the conversion of accounting standards from IGAAP to INDAS, it added.

After excluding the non-cash adjustment, the company’s actual cash losses come to approximately Rs 375 crore, up 4.4X.

The company had remained the only profitable edtech firm until FY22, while steadily growing its top line.

Its operating revenue surged 160.7%, touching Rs 1,940.4 crore in FY24 compared to Rs 744.3 crore in FY23, as per its recent consolidated financial statements.

The startup’s total income reached Rs 2,015.1 crore, up 160.8% increase year-on-year (YoY).

For context, BYJU’S surpassed the Rs 2,000 crore revenue mark in FY20 and Eruditus in FY23, while PW achieved this milestone in its fourth year of operations. BYJU’S was incorporated in 2011, Eruditus in 2010, and PW in 2020.

Meanwhile, the company’s expenses surged by 280.4% to Rs 3,279.1 crore in FY24 compared with Rs 862 crore in FY23.

The sharp rise in expenses was driven by employee benefits, the firm’s second-largest cost centre, which jumped to Rs 1,159 crore—a 180.9% YoY.

Its other expenses surged by 442.4% YoY to Rs 1,660 crore, including a significant increase in miscellaneous expenses, which rose by 755.9% to Rs 1,452.7 crore.

Interestingly, PW also reduced its advertising and promotional expenses by 39.9%, although these still accounted for the company’s second-largest expense, totalling Rs 37.3 crore in FY24 compared with Rs 62.1 crore in FY23.

PW has experienced impressive growth, however, sustainable growth and profitability are essential, and it must navigate its own challenges as it expands.

Earlier this year, PW Co-founder Prateek Maheshwari told YourStory that FY24 was the year of “growth,” while FY25 is the year of “sustainable growth,” as PW aims to return to a profitable path.

“We have bounced back this year, with the first two quarters being EBITDA profitable for the first time in our company’s history,” he added. EBITDA, or earnings before interest, taxes, depreciation and amortisation, is a measure of core operational efficiency.

While the profitability metric for FY25 cannot be determined due to the transition from I-GAAP to Ind-AS, this fiscal year is expected to be the highest in absolute EBITDA profitability since inception, according to Maheshwari.

I-GAAP (Indian Generally Accepted Accounting Principles) refers to the traditional accounting standards used in the country, while Ind-AS (Indian Accounting Standards) is a set of accounting standards aligned with IFRS (International Financial Reporting Standards) for greater transparency and consistency.

In September, PW raised $210 million in a Series B funding round led by investment firm Hornbill Capital, with a sizable participation from venture capital firm Lightspeed Venture Partners. This was a significant milestone given the scarcity of substantial deals in India’s edtech sector lately.

With the latest funding round, PW’s post-money valuation has soared to $2.8 billion, making it the third-most valued edtech firm, trailing only Unacademy ($3.4 billion) and Eruditus ($3.2 billion), based on their last valuations.

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