Deal in focus: Downing invests £3.8m in Goonhilly’s space future

What do 1985's Live Aid concert, the 1969 Apollo 11 moon landing and Telstar, the famous satellite that inspired a 1962 hit single, have in common? The answer is Goonhilly Earth Station.

Based in Cornwall, England, the multi-antennae location has played a central role in the video transmission of some of history's most famous moments. Its initial antenna, Arthur, received the first images from Telstar in 1962, an event that ultimately paved the way for modern satellite communications.

In 2006, Goonhilly's owner, British Telecom, announced its decision to close the site. A knight in shining armour arrived in the form of GES, a company led by satellite communications engineer Ian Jones, which reinvented the site on the basis of its existing hardware. Currently, the company's contracts are for managing the position of satellites and communicating with them. In the not too distant future, it aims to play a significant role in deep space communications.

In March 2014, the company received backing to the tune of £3.8m from venture capital firm Downing. "It is very special," says Jonathan Boss, a partner at the VC. "A very special deal. The antennae on the site are incredibly capable, and with our funding the team plans to add to their capability. There are well-developed plans to convert at least one of the antennae, which have historically all been used for communicating with orbiting satellites, into a radio telescope for looking deep into space."

European investment
GES hopes to see investment in the site from the European Space Agency (ESA). ESA draws resources from European countries and reinvests in projects across the continent proportionally. To date, Boss says, the UK has not had enough space business to match the country's relatively high contribution to ESA. He describes Goonhilly as "a place where European space money can be spent in the UK".

Discussing a purpose-built site in Spain that received "tens of millions of euros" for deep space communications, Boss says: "Goonhilly has got hardware that could be upgraded for a fraction of that cost to provide a similar facility."

Despite talk of providing communications services for missions to Mars, Downing's investment rationale is very firmly rooted down here on Earth: "At Downing," Boss explains, "we focus on asset-backed deals that have a significant amount of freehold property attached. That, and the quality of the teams we back, is intended to reduce the risk."

With the fresh capital, GES was able to exercise a 999-year leasehold option, which it had agreed when renting the site from BT in 2011. As a result, the company ticked many of Downing's boxes: "Clearly what we have here is an incredible asset. It's a huge site with a load of very capable technology and investment on it," says Boss. This leasehold option is also cited as the main reason behind the quick turnaround of the deal: "I met them at the end of October and we provided bridging finance before Christmas," Boss says. "It took less than two months. Exercising their option was a critical part of their timetable."

Ground control to San Francisco
In addition to being an asset-backed business, GES also comes with an impressive track record, having been "profitable from day one," explains Boss. "I thought the opportunity to take what is already a profitable business, secure the tenure and then expand their activities was really exciting."

The company has recently taken on a mission to download and transfer pictures for San Francisco-based Earth-imaging satellite company Planet Labs. Boss says that Planet Labs' flock of satellites will provide pictures of a similar nature to Google Maps, but will be updated "much more regularly." The Californian company uses CubeSats, satellites measuring around 12" in each dimension that are relatively cheap to launch. These small satellites will play a large part in GES's future, despite Boss's explanation that this is "at the very other end of the spectrum" to deep space communications in terms of cost.

People
Downing – Jonathan Boss

Advisers
Equity – TLT Solicitors, Peter Naylor (Legal); PWC, Philip Hare (Tax).
Management – Wragge & Co, Nicholas Crabtree (Legal).

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Buyouts
• UK / Ireland
• Technology
• United Kingdom