MORGAN STANLEY: Disrupting Defence – HawkEye 360

Morgan Stanley Research Government Technology Disrupting Defence – HawkEye 360 The rapid evolution of the space ecosystem and the corresponding demand from the DoD and IC has attracted new entrants to the government markets. Taking a closer look, we profile an innovative startup, HawkEye360, that’s solving complex problems with a new approach. In the past we’ve highlighted the rapid pace of change within the space domain that is being driven by technological advancement and growing national security concerns alongside robust public and private investment. This context has attracted new entrants to the market with unique and innovative approaches to solving some of the most complex problems we face on Earth. In this edition of Disrupting Defence, we profile HawkEye 360, a company that is amongst the leading innovators in the space ecosystem with its unique commercial RF data and analytics approach to solving defence and intelligence problem sets. Company: Founded in 2015 as a portfolio company of Allied Minds HawkEye 360 was founded in 2015 as a portfolio company of Allied Minds, an IP commercialisation company focused on early stage development within the technology sector. Headquartered in Herndon, Virginia, HawkEye 360 is located near both the National Reconnaissance Office (NRO) and National Geospatial-Intelligence Agency (NGA). The technology and idea for HawkEye 360 was originally developed by two Virginia Tech professors, Charles Clancy and Bob McGwier, along with former NRO employee Chris DeMay. Technology: Space-based radio frequency (RF) data and analytics HawkEye 360 is a commercial provider of space-based radio frequency (RF) data and analytics to government customers. They own and operate a first-of-its-kind commercial satellite constellation that detects, characterises, and geolocates RF signals. This generates RF data that the company can then process and analyse to form insights about activity on Earth. Everything from communication devices, such as cell phones, to navigational aids, emit RF energy that can be detected, located, and mapped to form geospatial and signals intelligence. The derived intelligence can be applied to use cases in a wide range of missions including: Defence – Protect borders and assess potential threats Maritime – Track dark ships and identify illegal fishing Telecommunications – Survey spectrum use and deployment Crisis Response – Support emergency rescue operations Leadership: Impressive lineup of leaders in both its front office and Board The founding team has since moved on to other endeavours, however, the company boasts an impressive lineup of leaders in both its front office and Board. Among a range of company bios, we’d highlight the following: Management John Serafini – Chief Executive Officer – John previously served as SVP of Allied Minds where he led the formation, financing, and management of HawkEye 360, along with other Allied Minds companies such as BridgeSat, Federated Wireless, and Percipient Networks. A former Airborne Ranger-qualified U.S. Army infantry officer, John is a graduate of the U.S. Military Academy, Harvard Business School, and the Harvard Kennedy School of Government. (see here) Kari Bingen – Chief Strategy Officer – Kari previously served as the Deputy Under Secretary of Defense for Intelligence and Security from May 2017 to January 2020, a role in which she helped the Secretary of Defense direct and set priorities for the intelligence agencies under the DoD’s purview, including the NGA and the NRO. (see here) David Farnsworth – Chief Financial Officer – Dave previously served as VP and CFO for Integrated Defense Systems, a $6bn operating unit of Raytheon, where he had oversight of financial activities. Before that, he was CFO for the Intelligence, Information and Services operating unit of Raytheon and worked at Raytheon’s Corporate headquarters, where he spearheaded several strategic company initiatives. (see here) Board of Directors: Mark Spoto – Mark is currently a Managing Director at Razor’s Edge Ventures where he is responsible for identifying and evaluating investment opportunities, analyzing markets and industries, structuring deals, fundraising, and managing relations with LPs, as well as supporting and advising portfolio companies. Prior to joining Razor’s Edge, Mark was a partner at Cooley LLP, a national technology law firm. He worked with many emerging and high growth technology companies and investment funds, and his practice focused on mergers and acquisitions, venture capital, private equity and public securities offerings, and general corporate representation. (see here) Chris Emerson – Chris is currently the Chairman and President of Airbus U.S. Space and Defense, Inc., where he oversees the operations, activities and strategy to offer advanced solutions to meet the most sophisticated U.S. defense, space and security requirements. Previously, he held positions as the President of Airbus Helicopters, Inc., and SVP, Head of Marketing at Airbus commercial aircraft in Toulouse, France. Chris graduated from the University of Alabama with a degree in International Finance and currently serves on the President’s Cabinet. (see here) Honorable Arthur L. Money – Art is the former Assistant Secretary of Defense for Command, Control, Communications and Intelligence (ASD (C3I)) and also served as the Senior Civilian Official, Office of the ASD (C3I); Department of Defense Chief Information Officer; Assistant Secretary of the Air Force for Research, Development and Acquisition; and Chief Information Officer for the Air Force. After leaving government service, Art has worked with a variety of companies developing technology in intelligence, signal processing, and information processing. (see here) Fund Raising / Investors: Series D in November 2021 brings total funding to over $300mn HawkEye 360 announced its latest round of financing, a Series D, in November 2021 (see here). To date, the company has brought in over $300mn across several rounds. Notable investors include Airbus, Raytheon, Jacobs, Razor’s Edge, Seraphim Space, Adage, Insight Partners, New Vista Capital, Advance, Esri, NightDragon, Sumitomo, Space Angels, Shield Capital Partners, Dorilton Ventures, and others. Notable financing rounds were as follows: Series A – $11mn round led by Razor’s Edge Ventures Series B – $70mn round led by Airbus and Esri Series C – $55mn round led by NightDragon Series D – $145mn round led by Insight Partners and Seraphim Market: U.S. defense and intelligence customers seeing strong funding growth HawkEye 360 largely focuses on U.S. defense and intelligence customers, an end market that has seen exceptional growth in recent years and is expected to do so for the foreseeable future. According to the DoD’s recently released FY22 budget request, it is seeking $16.7bn for Space Based systems. This year’s request is up $1bn (or 8%) and the a 5-year CAGR is nearly 20%. Underpinning the growth in funding for DoD space systems is the Pentagon’s recognition that Space is now a “warfighting domain critical to the Nation’s security, economic prosperity, and scientific knowledge.” Catalysts / News: Latest funding round will accelerate a number of initiatives The latest funding round will support the expansion of its satellite constellation and complementary infrastructure, and acceleration of the company’s services to humanitarian, environmental, commercial and national security customers. HawkEye 360’s Third Satellite Cluster Begins Commercial Operations HawkEye 360 Reaches Contractual Milestone for Delivering Space-based Radio Frequency Mapping NGA Awards HawkEye 360 RF Mapping Contract HawkEye 360 Successfully Launches Next Generation RF Satellites HawkEye 360 Announces Commissioning of Second Satellite Cluster HawkEye 360 Supporting RF GEOINT Pilot Program for the NGA FCC Approves HawkEye 360 Application for 15 Satellites HawkEye 360 Awarded Study Contract by the NRO HawkEye 360 Announces Successful Launch of First Three Satellites For Editorial Inquiries Contact: Editor Kym Bergmann at [email protected] For Advertising Inquiries Contact: Director of Sales Graham Joss at [email protected]