A group of Chinese venture capital firms have invested their money in Beijing-based satellite company GalaxySpace to speed up the launch of its 5G communication satellite.
The company didn’t disclose the amount of the investment but did say that GalaxySpace was now worth $705 million. Valued at Rmb3 billion ($423 million) after its Series A round in November last year, its value has grown 66% over the past 10 months.
JIC Technology Investment, the investment arm of state-backed Central Huijin, led the round. Proceeds will be used to develop its technology for low orbit broadband communications satellites.
IDG Capital, Shunwei Capital, Legend Capital, Morningside Venture Capital, Gaorong Capital and Source Code Capital all joined the round that completed on Monday. They are the same investors who participated in the Series A round.
This investment will send China’s 5G into orbit. GalaxySpace told FinanceAsia that its first satellite will be launched in the fourth quarter of this year. It intends to release details of the launch soon.
If the launch succeeds, it will be the first low orbit broadband communications satellite developed by a Chinese private company. China completed the first launch of such a satellite in December last year.
“A space-based network can be a very good complement for the ground network in the 5G era,” GalaxySpace chief executive Xu Ming said. “We can cover the blind spots of a 5G network with the help of the satellite, and provide ten times the speed of 4G communications.”
GalaxySpace is taking London-based OneWeb as the benchmark. This British company gained first-mover advantage by launching six low orbit satellites in February this year.
The global space economy exceeded $400 billion in 2018, according to a report published by Space Foundation. And the rate of global launches is picking up. Given the support of the Chinese government, we are likely to see more commercial developments in the aerospace industry take off.
For GalaxySpace, it is focusing on manufacturing a low-cost satellite better to serve 5G development in China.
China is trying to speed up the construction of its 5G infrastructure, and a space network is an important link in the whole plan. Whether GalaxySpace is likely to partner with any other Chinese 5G equipment manufacturer is still unknown, but it is ready to be launched into the orbit.