Luxembourg-based satellite telecom operator OQ Technology is testing investor appetite for space-based Internet of Things (IoT) technology, seeking EUR 30 million in fresh funding as competition intensifies in the nascent market for satellite-enabled device connectivity.
The company, which has deployed 10 satellites since 2019, plans to launch 20 more as larger telecommunications companies and satellite operators begin developing similar IoT services. The Series B funding round follows a EUR 13 million raise in 2022 and aims to strengthen its global 5G IoT network coverage.
OQ Technology has secured initial backing through a convertible loan from the Luxembourg Space Sector Development Fund, a joint initiative between SES S.A. and the Luxembourg government. Previous investors, including Aramco's venture capital arm Wa'ed Ventures and Greece's Phaistos Investment Fund, are participating in the new round.
The startup differentiates itself by focusing on standardized cellular technology for narrowband-IoT, contributing to 3GPP protocols that allow existing cellular chips to connect with satellites. This approach contrasts with proprietary systems offered by competitors, replacing traditional bulky satellite systems with compact, cost-efficient IoT modems that offer plug-and-play functionality.
"The satellite IoT sector is still largely in the proof-of-concept phase," says the company representative. "While there's significant potential, companies face challenges in standardization and convincing industries to adopt these new technologies at scale."
In an effort to secure its supply chain, the company is exploring partnerships in Taiwan's semiconductor industry. It has begun collaborating with the Industrial Technology Research Institute (ITRI), though these relationships are still in the early stages. The company has shipped initial terminals to prospective Taiwanese clients, marking its first steps in the Asian market.
The global reach for semiconductor partnerships comes as the company expands its geographical footprint, having established subsidiaries in Greece, Saudi Arabia, and Rwanda. Plans for US market entry are underway, though regulatory approvals and spectrum access remain hurdles in some markets.
Current clients include Aramco, Telefonica, and Deutsche Telekom, primarily using the technology for asset tracking and remote monitoring in industries such as energy, logistics, and agriculture. While the company estimates a potential market of 1.5 billion devices that could use satellite IoT connectivity, actual adoption rates remain modest.
"The challenge isn't just technical capability," notes the company representative. "It's about proving the economic case for satellite IoT in specific use cases where terrestrial networks aren't viable but the application can support satellite connectivity costs."
Market dynamics are also shifting. Recent announcements from major tech companies about satellite-to-phone services have sparked interest in space-based connectivity, but may also increase competition for spectrum and market share. Several companies are pursuing similar standards-based approaches, potentially commoditizing the technology.
For OQ Technology, the ability to deploy its planned satellites and convert pilot projects into paying customers will be crucial. While the company's focus on standardized technology may reduce technical risks, successfully scaling the business will require navigating complex regulatory environments and proving the technology's reliability across different use cases.
Credit: OQ Technology
