M A X

How Data From Space is Disrupting the Market

And Why Canadian Startups Should Get Involved

© 2016 MaxQ Accelerator Inc.

M A X

Canada’s first accelerator for space startups www.maxq.ca

MaxQ is proudly supported by:

Space is one of the fastest growing sectors in the global market, and Canada has traditionally been a market-leader in space technologies.

Canada currently generates just under 1 per cent of global space revenues with a Compound Annual Growth Rate (CAGR) of 2.9 per cent.

To compare to another medium sized space economy: the UK space sector grew at a rate of 11 per cent in 2014. And although there is a slowing of the sector, growth is expected to maintain around 7.3 per cent CAGR.

The global market for space is forecasted to go to $560 billion USD by 2030, which would require a manageable CAGR of 6.09 per cent.Space and, more specifically, space-enabled services will be at the forefront of the fourth industrial revolution.

The fourth industrial revolution will be built by the ‘enterprising’ economy. New ideas and technologies will come as much from new entrants, disruptions and entrepreneurs as much as they will from large and established market players.

Space-Data Revolution

Space is about so much more than satellites, rockets and space stations – known in the industry as upstream. The real growth has been in downstream: the explosion of space-data and the real-world services and products that can be built from that data.

Canada is currently in an imbalance in comparison with other space economies of the same size, with only 50 per cent of the market focused on the services and products that come from the use of data from space.

Risk of Being Left Behind

Canada needs to do more in the application of space-data to prevent being left behind.

The United Kingdom – which was at a similar point as the Canadian space economy in the 1990s – now has a space market worth over $24 billion USD and a market share of over 7.5 per cent that was achieved with a mix of 89 per cent downstream (data applications) and 11 per cent upstream (hardware).

Even upstream space technology is changing radically, with a plethora of small satellites and low-cost launchers changing the sector from the traditional large multi-million and even billion-dollar satellites into low cost satellites that cost barely a million to build and launch. >>

Preface

M A X 4

“New Space” Seizes the Risk

Innovation requires risk, and an entrepreneurial spirit to seize that risk and strive for something new. Space is the one of the final frontiers for humanity, and the technologies that are emerging from the space sector are already transforming our lives.

Whether it be new materials, understanding bone loss, better sensing technology, more environmentally sustainable resource extraction or better integrated transit and infrastructure grids: space and orbital analytics are weaving in and out of our collective lives.

A community of relatively new aerospace companies is working to develop low-cost access to space, and new spaceflight and satellite technologies.

The companies in this emerging sector are advocates of low-cost spaceflight, satellite technology and more liberal policy in regards to access to space. The sector is known as “New Space” or “Entrepreneurial Space” (also formerly known in the industry as “alt.space”).

Transformative Technologies

Decreasing entry costs and a range of new, small satellites have massively increased the amount of data that is being transmitted back to the Earth. This is opening up opportunities for using the Big Data of space to radically transform our economies, societies and lives.

In rocket science, the term “MaxQ” stands for one of the most fundamental points in the flight of a rocket. It is the point at which aerodynamic stress on a vehicle in atmospheric flight is at its strongest, and a rocket that survives this point will likely make it into orbit.

This is why we’ve named Canada’s first accelerator for space startups MaxQ. If startups can survive the point of maximum pressure on their journey to the market, they will likely be successful.

MaxQ was born out of a vision to build a vibrant sector in Canada and to provide startups – many of which are forced to move to the United States to find sustainable funding, mentorship and support – with a Canadian option in their mission to get into the market.

The case studies in this report are practical illustrations of how the space sector already impacts our daily lives in Canada, and around the world – but also how new innovations are set to do so even more in the near future.

On behalf of the MaxQ team, I hope these examples will inspire you!

Brodie Houlette President and Co-Founder, MaxQ Accelerator

Less Invasive Prospectingof Mineral Deposits

Hyper-Efficient Supermarket Supply Chains

Better Economic Reportingin Developing Countries

Tackling Illegal andUnreported Fishing

Canada’s Place in The Emerging Market

Sources

Content

6

8

10

12

14

16

M A X 6

Current prospecting methods for minerals are not only environmentally invasive, but also extremely expensive.

The cost of prospecting for minerals are significant for mining companies, both in terms of licensing and the execution of the often invasive methods. The technologies used sometimes require large amounts of

environmental and social disruption to verify claims.

New Earth Observation and Geoanalytical payloads on satellites are set to change the way mining companies target areas for mining, making expensive and invasive on-ground prospecting redundant.

Mining companies can use orbital analytics to target within a high confidence level – and with

surprisingly high geographical accuracy – where a specific mineral deposit is, and extract it in a more sustainable way.

This is space-enabled services in action. Providing better services to traditional companies to lower both the ecological footprint of mining and the economic costs to shareholders.

Installation of new equipment at the world’s largest copper mine in Chile. Credit: Bechtel

Case Study #1

Less Invasive Prospectingof Mineral Deposits

Less Invasive Prospectingof Mineral Deposits ■ The value of the global mining sector was $1.48

trillion USD in 2014 ■ Mining contributed $57 billion CAD to Canada’s

Gross Domestic Product (GDP) in 2014 ■ The industry accounted for 18.2 per cent of the

value of Canadian goods exports in 2014

■ Canada’s value of mineral production was $44.7 billion CAD in 2014

■ The mining industry’s payments to Canadian federal and provincial governments total $71 billion CAD in taxes and royalties over the last decade (2003-2012)

The mining sector as an economic engine:

Facts

The Escondida copper, gold and silver open-pit mine in Chile, image by the ASTER satellite. Credit: Satellite Imaging Corporation

M A X 8

The supermarket of the future will be powered by data and space-derived data will be important to managing to bring costs down and tackle the food wastage crisis.

Food Wastage is a huge global problem. According to a recent report by the UN Environment Programme (UNEP) and the World Resources Institute (WRI), about one-third of all food produced worldwide – worth around $1 trillion USD – gets lost or wasted in food production and consumption systems.

When this figure is converted to calories, this means that about one in four calories intended for consumption is never actually eaten. In a world full of hunger, volatile food prices , and social unrest, these statistics are more than just shocking. They are environmental, moral and economical challenges that governments are increasingly targeting.

By introducing the logic of the Just-In-Time principle – pioneered in Japan’s car industry – the food waste issue can be targeted at the supermarket supply chain level. Products that are delivered in a more intelligent and efficient manner can significantly cut back on food waste.

Just-In-Time is a waste-elimination philosophy and focuses on “seven wastes”: overproduction, waiting, transportation, processing itself, stocks, motion, and making defective products. Satellites and space-enabled services can help supermarkets bring the efficiencies of a Just-In-Time system into supply chains by:

■ Integrating real-time local supermarket stock levels and customer targeting with accurate data about crop yields.

■ Using real-time local stock levels and aggregate customer habits in a geographic location with storage stocks to send food deliveries that are customized to each local supermarket to lower the amount of overstocking.

Staff member stocking shelves at the Coop Supermarket of the Future showcased at the Milano Expo 2015 Credit: Microsoft

Case Study #2

Hyper-Efficient Supermarket Supply Chains

Hyper-Efficient Supermarket Supply Chains ■ World-wide, one-third of the food produced for

human consumption is lost or wasted, most of it before it ever reaches consumers. That’s about 1.3 billion tonnes per year.

■ In developed countries, like Canada, more than 40 per cent of food losses occur at retail and consumer levels.

■ About 222 million tonnes of food are wasted per year at the consumer level in developed countries—that’s almost as much as the total net food production in sub-Saharan Africa (230 million tonnes per year).

Food waste globally:

Facts

Near Infra Red (NIR) capturing of a farm. Credit: DroneMetrex Pty

■ Canadians waste $31 billion CAD of food every year, 47 per cent wasted in the home.

■ The primary contributor to consumer food waste is high expectations—demand for high-quality, aesthetically-pleasing food is a key factor behind the volume of food waste occurring among consumers.

■ In North America, over 30 per cent of fruits and vegetables are rejected by supermarkets because they aren’t attractive enough for consumers.

Food waste in Canada:

M A X 10

Accurate economic data, especially in developing countries is vital for good decision making processes and planning by international agencies, companies and NGOs.

Government figures are often weeks old, and sometimes get manipulated. Consumer prices released by governments reflect broad trends rather than what shoppers actually pay in the market.

Satellite imagery is already being used to reveal the extent of, say, an electrification project in rural Zimbabwe. With the help of new innovations this can be expanded to which exact houses are actually connected to the grid.

American startup Premise, for example, is marrying data analytics with Earth Observation satellite imagery to create better data sets. The company’s idea is simple: put a smartphone app in the hands of people on the ground and get them to capture data, which is sent to a central server.

The startup’s algorithms can spot patterns and anomalies, it can request more information and, ultimately, it can publish the data in a form that can be used by Premise’s clients, from commercial organisations to NGOs.

This has real benefit for tackling social problems such as food inflation, resource shortages, efficacy of development programmes to whether a school is open in a war-zone or aid is being delivered and dispersed.

Some of the organizations using Premise are big institutional investors and agencies. The World Bank is using space-enabled data to trying to figure out where to build roads, for example. Space-enabled data is changing the face of international development.

For example, the Bill & Melinda Gates Foundation is trying to map where critical financial services are available in developing Africa. And the UN’s World Food Programme needs to understand where market imbalances are happening to better target food aid and support. Space is changing the way we deliver development assistance.

Case Study #3

Better Economic Reportingin Developing Countries

An electrification rate report. Credit: Premise

Better Economic Reportingin Developing Countries ■ Official development assistance from the

Development Assistance Committee (DAC) countries grew by 1.2 per cent from 2013 to 2014 to a total of $137.222 billion USD

■ Net Private Flows from DAC countries to developing countries in 2014 totalled $402.936 billion USD

■ Net Grants by nongovernmental organizations in DAC countries in 2014 totalled $32.246 billion USD

■ Total net flows from DAC countries totalled 577.030 billion USD in 2014

Development assistance globally:

Facts

Public gathering in Malawi. Credit: Lindsay Mgbor, UK Department for International Development

M A X 12

Illegal and unreported fishing worldwide accounts for up to 26 million metric tons of fish annually, worth up to $23.5 billion USD.

That equates to more than 800 kilos of wild-caught fish stolen from the seas every second. This threatens biodiversity and food security, and deprives those who follow the rules of much needed income.

Traditional vessel monitoring systems can be switched off, allowing offenders to catch fish from ecologically sensitive areas or to go over their quotas with little ability for coast guards to monitor outside of the stop and search tactic.

The UK’s Satellite Applications Catapult (Britain’s space-startup growth fund and accelerator) has partnered with the non-governmental organisation Pew Charitable Trusts and the European-arm of the Canadian satellite data services company exactEarth.

The partnership captures and analyses satellite shipping data, and merges it with data from coastguards and local fishermen around the world to pinpoint the location of suspect vessels. The result is a powerful, nimble programme that is expected to revolutionize the way illegal fishers are detected, tracked and prosecuted.

Case Study #4

Tackling Illegaland Unreported Fishing

Salmon net-fishing. Credit: Aleutians East Borough, Alaska

Tackling Illegaland Unreported Fishing

The global fishing fleet visualized. Credit: Global Fishing Watch

■ Pirate fishing costs an estimated $10-23.5 billion USD annually.

■ An estimated 20 per cent of global catch is from pirate fishing, 11-26 million metric tons per year.

■ Pirate fishing may represent up to 30 per cent of the catch for some high-value species

■ Crews can buy “flags of convenience” online for as little as $500 USD so they can move incognito into regions where they have no license or right to fish.

■ Drug trafficking, human trafficking, and illegal immigration often accompany pirate-fishing activities.

■ The high seas – international waters beyond the 200 nautical mile exclusive economic zones of coastal nations – cover 45 per cent of the planet and are where most illegal, unreported an unregulated fishing occurs.

Illegal fishing is putting a strain on the sector:

Facts

M A X 14

Canada's Place in The Emerging Market

MaxQ is a “Made-In-Canada” answer to the startup evolution spreading through the space industry globally. Its mission? To further the development of Canadian space technology, retain Canadian talent and generate Canadian space champions.

Market-ready is where a company or team has a working prototype and a plan to market, but still needs a bit of push to get over the final hurdles to market.

MaxQ’s accelerator program helps startups do just that through an intensive

program of mentoring, business development assistance – and access to industry experts.

Canadian Success

A great example of an existing Canadian success story is UrtheCast. This Vancouver-based company operates the first publicly accessible high definition cameras installed on the International Space Station, and makes that data available through its innovative software platform.

The startup has revenues of $53 million CAD, and is one of the most visible New Space companies in Canada.

MaxQ was named after one of the most fundamental points in the flight of a rocket, the point at which aerodynamic stress on a vehicle in atmospheric flight is at its strongest.

A rocket that survives MaxQ will likely make it into orbit. This is an apt comparison for startups. If they can survive the point of maximum pressure on a startup on its journey to market, they will likely be successful. >>

Launch of MaxQ at NASA’s 2016 Space Apps Challenge at Communitech.

Canada's Place in The Emerging Market

“With a comparable mix of population density, research universities, technical talent, financial resources, corporate leadership and emerging entrepreneurial culture, the Toronto-Waterloo region has the ingredients to do for Canada what Cambridge in Great Britain and Silicon Valley have done for their countries – namely, make an outsized impact on economic growth and high-skilled job creation through world-leading innovation.”

— Iain Klugman, CEO of Communitech and Kevin Lynch, vice-chair of Bank of Montreal in the Globe and Mail newspaper

Silicon Valley North

MaxQ is set to host the first three to five teams in September 2016 at Google’s former offices in the Communitech campus in the Toronto-Waterloo tech corridor, also known as Silicon Valley North.

Global Innovation Hotspot

Ontario’s Toronto-Waterloo region is a global innovation hotspot and a centre of talent, growth, innovation and discovery. Rivaling the best in the world, this 100km stretch is the second largest technology cluster in North America.

It counts about 15,000 tech companies, 200,000 tech workers and some 5,200 technology startups at the last count.

Entry Requirements

What does it take to enroll in MaxQ’s program?

■ Startups should be using space data to create applications in the areas of Earth Observation, Geo Analytics, Big Data, Geomatics, Wearables and Biomedicine.

■ Teams need a working prototype that

is close or ready to be launched into the market.

■ Teams need to consist of two to ten founders of which at least one must be willing to be at Communitech in Kitchener-Waterloo full-time for the duration of the programme

■ Minimum six-month commitment. ■ Open to Canadian Citizens and

Residents only.

The main Communitech campus in Kitchener-Waterloo.

Teams can find out more, and apply on the MaxQ website:

www.maxq.ca

Case Study #1 ■ http://earthobservatory.nasa.gov/Features/

ASTERProspecting/ ■ http://mining.ca/resources/mining-facts ■ http://www.sciencealert.com/asteroid-mining-company-

deploys-first-prototype-spacecraft-into-orbit ■ http://www.abnewswire.com/pressreleases/global-mining-

market-2016-industry-size-growth-share-analysis-and-forecast-hexa-reports_62389.html

Case Study #2 ■ http://www.wri.org/publication/reducing-food-loss-and-

waste ■ UN Food and Agricultural Organization (FAO) Statistical

Yearbook 2012 ■ FAO Global Food Losses and Food Waste 2011 report. ■ Cut Waste, Grow Profit 2014 report. ■ http://www.secondharvest.ca/hunger-facts

Case Study #3 ■ http://www.wired.co.uk/magazine/archive/2016/04/

features/premise-app-food-tracking-brazil-philippines

Case Study #4 ■ https://sa.catapult.org.uk/ideasopportunities/ideas/

example-idea-tackling-illegal-fishing/ ■ http://www.triplepundit.com/uploads/pirate_101.Final.pdf ■ http://www.exactearth.com/applications/illegal-fishing

SourcesPublication design by W

ayAhead.ca

MaxQ is proudly supported by:

www.maxq.ca