The European Space Agency’s incubator network says the sky’s the limit

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However you put it, the European Space Agency (ESA) has a dynamic and enthusiastic team of cross-continental business warriors launching spaceports for business development and spurring tech transfer to the general economy along the way. Its network of Business Incubation Centres (BIC) will add its newest franchise in the Madrid Region this year.

The team in Spain is taking applications until October 21 for established companies younger than five years old and entrepreneurs to work on satellites, energy, chemistry, robotics, automation, or a number of other space-related industries. It will be the 11th BIC in the network with four more on the way by the end of 2016.

Talking to the forerunners of the operation, you get the sense that the sky is hardly the limit for their startup web. Their portfolio already includes 300 companies, 100 of them launched in the last 12 months alone. They touted 140 graduates at the end of last year employing 800 people and with a combined turnover of 60 million euros. If those numbers aren’t impressive, 87.5% of their companies are still alive after the first BIC opened in Noordwijk, Netherlands in 2004.

Madrid begins

The Spanish capital and region have been fortuitous lately. Google inaugurated its own incubator called Campus Madrid just last week. The city plays host to organizations like the Spanish Association of Startups, the startup incubator Wayra, and networking events such as South Summit. A number of polytechnic campuses dot the region, who will play a critical role in hosting the ESA-backed companies. Venture capital in Madrid has also steadily grown between 2013 and 2014 from €56.6 million to €60.3 million according to La Asociación Española de Entidades de Capital Riesgo (The Spanish Association of Venture Capital).

“In its early stage, ESA BIC Madrid Region is not planning to have an initial focus on any particular industry but it is foreseeable that a certain degree of specialization in sectors such as tourism and smart cities will take place in the future,” says Carlos Romero, Manager of Fundación para el Conocimiento Madri+d (Madrid Knowledge Foundation), whose organization is managing the Incubation Centre. We had the chance to speak with him recently at the 66th International Astronautical Congress in Jerusalem.

Romero explains that the four host incubators for BIC exemplify the Madrid Region’s mature startup ecosystem. The UPM Montegancedo Business Incubator in Pozuelo, PCM Business Incubator in Tres Cantos, UC3M Leganés Tecnológico Business Incubator in Leganés and URJC Móstoles Tecnológico Business Incubator in Mostoles will play host to the ESA-supported companies all with common features but some unique advantages to offer whomever is lucky enough to be accepted by ESA. The four have overlapping emphases in energy, bioengineering, drones, health, telecom and robotics, among other specialties. But Tres Cantos has a focus on nanotech and Leganés on aerospace. That reflects the eclectic mix of the companies that will likely enter the BIC, as the European Space Agency is open to a number of solutions that piggyback off of formerly exclusive space technologies.

“Entrepreneurs applying to an ESA BIC usually have a very strong technical background but there is a wide spectrum of applicants like established companies, students from universities, companies willing to support entrepreneurs,” Romero says. “Some other projects are directly proposed by university departments, and this implies an interesting ‘double technology transfer,’ both from the ESA and from the university, and its transformation into technology-based spin-offs.”

ESA’s sprawling startup ecosystem

Mapping ESA BIC, the European Space Agency's network of business incubators for technology transfer (ESA)
Mapping ESA BIC, the European Space Agency’s network of business incubators for technology transfer (ESA)

Every incubator shares a common financial and logistics infrastructure at its inception, but grows more unique over time. There can be a number of reasons for that, including strong local industries.

The BIC at Darmstadt, Germany for instance has a heavy focus on satellite navigation technology.

“It was more Darmstadt’s decision to differentiate because there was some more local expertise,” says Bruno Naulais, Technology Transfer Officer for the whole ESA BIC network, referring to companies like NYNEX Satellite OHG, work on GNSS (Europe’s answer to GPS), the European Space Operations Centre (ESOC) and EUMETSAT are all centered in the German town.

In Spain, government support is a critical component of the venture community and the new incubator in particular. But there is a thriving research ecosystem among Madrid’s universities whose experts also happen to be partners in the new BIC effort.

Naulais explains, “If you look at the Madrid Region it’s a big area with 6.5 million inhabitants (14% of Spain) with fantastic potential with a lot of universities, lot of companies in the space industries and a high technology concentration.”

ESA does not approach a given city. The member state approaches ESA, who will offer the location a “common approach” and support for marketing and production materials. ESA then organizes the hub and offers limited matching funding compared to what the initiators are willing to pay in. In the case of the Madrid Region, ESA expects to invest about €1.3 million in 10 new companies every year (€7-8 million over the course of five years to get 50 companies off the ground).

The ESA would like to expand, but it does not have a specific schedule of countries to target for new centers. The idea for the network was conceived in the late 90s and its first incubatee picked in 2003, but it has grown along with the nature of startup economics. There was a shift to wanting to create new businesses to try out emerging technologies outside of a company’s core operations. That led to a slew of fresh ideas.

“When you have a young BIC you get more established companies and over the years you see new people. Once you promote yourself, you interest more people,” Naulais says, pointing to the confederation of BICs in southern France (Sud France) as an example. He also adds that the tremendous environment his incubators provide has resulted in a lot of giving back, with graduates coming back to invest in new projects.

ESA companies to watch out for

Here are some of the most promising companies and projects that have participated in one of the European Space Agency’s business incubators:

1. Lilium Aviation

Lilium Aviation (screenshot)
Lilium Aviation (screenshot)

The Lilium Jet hopes to be the most efficient commercial electric aircraft in history. It can hold two passengers and travel as a three-wheeled car with its wings folded up when it’s on the ground. While it can reach speeds of 450 km/h in the air, its ground game is still limited to 60 km/h – still, that’s better than I can do.

2. Wayz Solutions GmbH

“Your great last mile navigation.” While its name might lend to some branding confusion (or some unexpected web traffic if people forget how to spell), Wayz offers the gLOC that provides all the data you would need about a given destination besides directions, including parking, with an automatic email straight to your phone. Instead of fumbling through one or several apps, all the info is automatic.

3. Lens R&D

Supported by the Noordwijk incubator, Lens might be the project’s biggest success to date. It has repurposed sun-sensing equipment on board satellites into an efficient and cheap consumer product 50 times cheaper than what ESA uses. They are already cycling their solution back into use in space. The company won Most Innovative Company in the Netherlands at Shell’s LiveWire Rising Star contest this summer.

4. MAVinci

With a name playing off the legendary invention of the helicopter by Leonardo da Vinci, MAVinci is a graduate of the Darmstadt BIC and produces unmanned aerial systems for automated mapping of industrial areas, including construction sites, pipelines, disaster areas, mines and quarries.

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