A Shanghai-based satellite startup has successfully raised RMB6.7 billion (US$932 million) from primarily state-affiliated investors, as part of an ambitious plan to fulfill a Shanghai initiative aimed at establishing a comprehensive constellation of over 12,000 satellites to facilitate satellite internet.
Shanghai Yuanxin Satellite Technology Co., Ltd. has completed a series A financing of RMB 6.7 billion, led by the China Development Bank Manufacturing Transformation and Upgrading Fund. The founding shareholder Shanghai Lianhe Investment continues to provide strategic support.
Participating investors include Guoke Capital, Guosheng Capital, SAIC Hengxu Capital, CCTV Media Fund, Guotai Junan, Zhongkechuangxing, and AsiaInfo Security.
Yuanxin Satellite was established in 2018 by the Shanghai Municipal State-owned Assets Regulatory Commission and led by state-backed Shanghai Lianhe Investment Co., Ltd.
Within a few years, it has rapidly gained a foothold in the field of low-orbit satellites in China. The company is an important part of a Shanghai satellite initiative called G60 Starlink and has completed the launch of multiple experimental satellites.
Previously announced by Shanghai, the G60 Starlink project aims to establish a low-orbit satellite constellation with global market competitiveness by 2027.
The G60 Starlink plan aims to establish a constellation of more than 12,000 satellites in space to facilitate communication and satellite-enabled internet.
The first phase of 1,296 satellites are to be completed from 2024 to 2027. The launch task of 648 GEN1 satellites will be completed by the end of 2025, and the subsequent launch of 648 GEN2 satellites will be completed between 2026 and 2027.
This means that the G60 Starlink plan will enter an intensive satellite launch period starting from this year.
The G60 Starlink plan first appeared in the public eye at the 4th China International Import Expo in November 2021, when the nine cities of the Yangtze River Delta G60 Science and Innovation Corridor jointly announced the plan to build a satellite internet cluster.
G60, originally the code for the Shanghai-Kunming Expressway, is where most enterprises in Songjiang District Shanghai, are located along both sides of the highway.
The earth’s low orbit can only accommodate about 60,000 satellites, and the communication frequency bands mainly used by low-orbit satellites are gradually becoming saturated, with very limited available space.
According to the regulations of the International Telecommunication Union (ITU), the rule for the use of satellite frequencies and orbits is "first come, first served." Therefore, there is fierce global competition in this field.
Yuanxin Satellite has obtained unique resources in the Ka frequencies and its commercial low-orbit broadband satellite constellation has been approved by China’s National Development and Reform Commission.
Government policy is a strong advantage for Yuanxin Satellite. Shanghai issued a policy last year to cultivate 10 key commercial aerospace enterprises and achieve a space information industry scale exceeding 200 billion yuan by 2025.
Yuanxin Satellite is likely one of the Shanghai government’s focus to "cultivate".
Financing for space startups have heated up lately. On January 24, Orienspace Technology announced the completion of nearly 600 million yuan in Series B funding, setting a new record for funding at the beginning of the year.
This is a company that specializes in carrier rockets and new aerospace transportation tools, led by entrepreneur Yao Song. To date, it has raised a total of approximately 1.7 billion yuan in funding, with a long list of investors behind it.
In December 2023, Galactic Energy announced the completion of a total of 1.1 billion yuan in Series C and C+ funding.
Additionally, Tianbing Technology, a company in the field of liquid carrier rockets, announced the completion of hundreds of millions of yuan in Series C+ funding, with a valuation exceeding 15 billion yuan.
According to data from Qichacha, the number of commercial aerospace funding events in China has doubled since 2015, from 15 to 46.
The year of 2018 saw the highest financing events on record, reaching 62 in total. There was a decline in 2019 and 2020, and by the end of 2021, there were only more than 30 funding rounds in the Chinese commercial aerospace industry.
The year of 2023 saw a return of investor enthusiasm in this sector, while whole-year data is lacking.