Chatting with the end users and then customers who are consuming this data, they would say, 'All I wish is I could get higher revisits, better data, more data, get new sensors on orbit.' The question then would come, 'Why is it hard to launch satellites more quickly?' Well, it turns out it's really hard to build the damn satellite. If you want to go get a satellite bus, and you want it quickly, I could literally have you before you leave LA, and you could be going back to New York or Austin with a satellite bus. What I can say is every single major defense prime except one is a customer of Apex, which we're very, very proud of. And that one who's not, I think soon will be, so just give it time. We actually make real money on everything we sell. So, if you look at our gross margins, we're a lot closer to a software company than we are a traditional prime.
What is the mission that Apex will enable or could enable in the future that you're most excited about?
Aries, welcome to the show. It's so great to have you. How does it feel to be the new CEO of Apex? No? You look kind of... You look pretty excited.
All right, we tried. We got a little bit. We got a moment.
Ian, welcome to the show.
Mo, hey, welcome to Apex.
Thanks. Great to be sitting here in Factory 1.
Thanks for having me. And you brought a guest.
I mean, not the guest. I mean, this is the... Aries and Nova are the namesakes that created Apex.
Well, he was a little nervous earlier as we tried to get... I was really hoping I could get some words from him.
I do think he was trying to take over this whole time as CEO, and when you confronted him and said, 'How does it feel?' he didn't know how to react.
Well, he has his name in very large letters behind... What is that, by the way, behind you?
That is one of our shipping containers for Aries. So, we have a bunch of Aries that we've... I mean, you see them all in the clean room behind you. Hopefully, you'll go in after and I'll build some, get our cost down, free labor. Sure. We have a bunch going off to customers and it's been fantastic. And this is one of the shipping containers. So, if you buy an Aries, you get it delivered in this.
You want to know my real dream though for when a customer gets delivery of a satellite is, you know, like if you get like a really fancy bottle of like tequila or alcohol, you open it up, the lights go on, music plays, like I want like the unboxing experience for satellites.
We got to, you know, up-level this industry.
Honestly, you know, it's been a little bit of a... we have a lot going on. We have a lot of customers and we haven't had the time to do it, but it's like a great hackathon project.
Yes. Okay, so you've raised north of 700 million.
We have already. Yes.
Yeah, a lot of responsibility on our shoulders.
The good news is we're going to return that to investors like a 100X.
Yes. Okay, well, well, well, well, well, we'll get into all that. But I do want to know, like, let's just kind of start from the very beginning, especially for those who maybe haven't heard the Apex story from the very beginning. Like, when did you feel that the satellite bus market was broken? All right, because you don't have a traditional space background.
I'm the least smart guy here, right? I come from a software background.
And that's why we get along so well. You know, it's a software background. So, I actually had sold my last company that I had started to Palantir. And we were doing AI and computer vision. We were building models for different national security applications. At the time, Palantir was starting to get involved with Project Maven. And they bought us. And we were getting involved with that, and specifically, my team and my program was asked to get involved with the satellite work that Project Maven was doing. And a lot of this was commercial data. So, think of it as data coming off satellites like Hawkeye 360.
That's a big yawn from Aries, by the way.
He's getting old, but he's heard this story before. He's like, 'Come on, move on already.' So, like, it's all these different... Planet, all these commercial companies. And I'm sitting there processing all that data, building algorithms, building basically how all the data comes together.
And in chatting with the end users and end customers who are consuming this data, they would say, 'All I wish is I could get higher revisits, better data, more data, get new sensors on orbit.' And I remember being like, 'Oh, this is so cool.' Like, I grew up loving space, but like, I went into the software world. So cool to see space moving faster. And the more I talked to these people, they were like, 'Wait a minute, like, why can't we go launch more satellites?' We can now finally get launch access, right? SpaceX Falcon 9 was being reused, phenomenal. You had companies like Rocket Lab who were, you know, making great strides with Electron and so on. So, why could we not launch more satellites faster? So, that was the premise that was at Palantir. It was like, huh, someone should go make satellites faster to launch. And the question then became, why is it hard to launch satellites more quickly? Well, it turns out it's really hard to build the damn satellite. You get launch capacity, you get access to the data. Building the physical satellite that we do here at Apex is pretty freaking hard. And the reason it's hard is satellites are these bespoke exquisite systems that are basically redesigned around a specific payload every time. So, if you are somebody like a great company like Planet, and you design a new camera sensor, they're going to go say, 'Well, we designed this higher resolution camera sensor, hyperspectral sensor, whatever it may be. Let's go design everything around it that allows it to work in space,' which is called the satellite platform or satellite bus in the industry. And if you're redesigning that every time, that's all this new non-recurring engineering, it's really slow. So, my idea was like very, you know, I would argue naive at the time. I was like, why can't we just do it like a software company where engineers design a set product, and then we go have a production line go build the same thing over and over again at scale. And when we go build it at scale, we could sell it to the customer amortizing in all that engineering, and we could actually build it before anyone needs it, so you get it delivered super fast. So, that was the idea for the company.
Yep. And then, you partnered with Max Menassi.
Tell me a little bit about him and what brought you together.
Yeah, so, Max and I met, oh god, it was like three years before we founded Apex. And at the time I was like in the process of selling the company to Palantir. I grew up in LA and came back to actually visit, I think, my parents in LA for like the weekend, and I went to go see an old friend of mine from high school, this guy Andrew Goldberg, who I think you also know. And I went over to Goldberg's apartment and in walks Max.
And we start chatting and I'm like, oh, that's... and this is like before I even had the idea for Apex. So we became friends back then and got to know each other, all thanks to Goldberg, like the all-star recruiter, right? Like, shout out to him. And we stayed in touch and over the years as I was at Palantir, I left Palantir to go do early-stage investing and so on, we kind of kept iterating on this idea. He was at SpaceX, he was really the pioneer that helped them scale manufacturing. We started thinking about how do we come together here. But the defining moment was we were in a WeWork in Santa Monica when I was kind of incubating this idea, and Max flew down, he was in the Bay Area at the time, and he brought his dog and I brought my dog Aries, and his dog is Nova. And the four of us, Aries, Nova, Ian, and Max, got together in a WeWork and spent the day ideating on this concept that actually then turned into Apex. And there was another person who was involved at the time, actually, who you also know very well, who is now one of our large investors, and his firm, Interlagos, has a seat on our board and everything, so it all comes full circle.
So that first six months, now you have this insight on the market and the bus market and the customer side, what went right those first six months and what did you maybe like miss at the time or misunderstand about the market, if anything?
Yeah, so it's a really good question. When we first started the company, the premise was speed is going to be like the only thing customers cared about, so we could effectively go and forget about quality, forget about that, and just focus on like super quick, get things in space, that's all that really mattered. And I remember we actually... I actually have a photo of the whiteboard from one of our like sessions where we're planning this out, and we're like, 'Oh, you know, we could just piece some, you know, COTS, whatever, terrestrial electronics together. We'll get this thing in space.' We're going to build a... you know, we always had Aries to be the first satellite we wanted to make, which carries about 100 to 150 kg of payload. So this is not a CubeSat. This is like a real satellite. And I remember on the whiteboard we're like, 'We could go make that thing for, you know, 200K, right? Like we'll get some motors, we'll stick some weights on them, we'll make reaction wheels. All that people care about is speed, quality doesn't matter.' I think we underestimated that, and we very quickly started pivoting to saying, 'Okay, it's not just about speed, it's about building a quality, affordable product as quickly as possible.' It's like that right middle ground. It's like imagine if you're buying a car, and you're going and buying it from not Ford, but some car manufacturer, and like the thing might like kill you because it's low quality. Like, you know, I don't know, they say BYDs are not very safe. So you buy one of those, it's like, eh, you probably don't want that.
Yeah. So what's the... okay, so what's the company's product set today? So you have Aries, you have Nova,
and I know you have a third platform.
We do. So what's actually pretty cool, I talked... Today's Monday, and every Monday we have our onboarding class, and one of my highlights of my week is, you know, I spend time every Monday with our onboarding class. And one of the stories I was telling today is when Max and I first started with Apex, and you can actually look at this. Go in the Wayback Machine and look at our website from, you know, 2022, when you guys broke the news that we were being founded.
We always envisioned a product lineup of small, medium, and large.
And what's pretty cool about that is Aries is the small one, as you can see, you know, it's only 16 lbs. Satellite's a little bigger. We have Nova, Max's dog, that's our medium-size vehicle, and, you know, we are producing those actively right now. You could see on the line, and we have the first one launching shortly. And then that carries about 300 kg of payload. And then we have our large vehicle Comet that depending on the launch configuration can actually carry up to a couple of thousand kilograms of payload, which is pretty cool.
That's a really awkward and long story, but let's just say we had an initial employee who we were trying to... This is like back in end of '22.
One of our very early employees, I don't want to name names here.
He realized that Aries was Aries, Nova was Nova, and he's like, 'Well, what's the name of our third vehicle?' And we said, 'Well, who has a pet?' The rule is you have to have any animal, a pet with a space-themed name.
So he said, 'I'm about to adopt a dog.' And we said, 'What's the dog's name?' And he said, 'If I name it Comet, I came up with the idea of Comet. Can we name the satellite Comet?' And we said, 'Of course.' So we announced Comet, we put it on the website. He never rescued the dog.
I see. Okay. Well, in memory.
So I'm really hoping that one of our employees changes their pet's name to Comet, but no one's dedicated enough to do that. Really sad.
Well, I'm sure you'll get... I'm sure that'll happen.
So Comet is... Comet's a... Is it a few thousand kilograms as far as like...
So here's how you think about it. And this is actually something that I think is often misunderstood about kind of the mass and all that. There's really two constraints when you think about how much mass you're putting into orbit. One of the constraints is effectively how much can you control in space. So think of that as your attitude determination control system. You have reaction wheels and torque rods and you need to move around a certain amount of mass. The limiting factor is usually how you're actually launching it into space. So if you're launching on, for example, a Falcon 9 rideshare, and you're launching an Ares, you're going to buy a full plate. When you buy a full plate from SpaceX, there's a certain amount of mass limitation that you're allowed to put on there. With an XL plate, if you fly a Nova, you're doing that. But the moment that you move into a dedicated launch in your own launch, which as a company now we're moving into where we're facilitating effectively our own rideshares and we are buying our own Falcon 9, so we control the schedule, you can actually start to meld these vehicles in ways where you can put a lot more mass on them. And we've always, because I mentioned earlier quality is so important to us, we've always over-specced and over-designed our vehicles to be like pretty able to carry more than we advertise because we always like to under-promise and over-deliver. And because of that, we can actually carry quite a bit more mass. So, Nova, for example, we're using it to support some of our efforts around like Golden Dome and space interceptors, can actually carry quite a bit more mass. Comet even more so depending on the launch configuration.
Okay. And wait, how are you thinking... is it sort of the plan and the product roadmap to continue to build larger and larger satellites as you need as a customer?
It really depends on where the market's going. So, I think when we started Apex, we always saw there was a pretty big market for Aries-sized vehicles, really good for Earth sensing and space sensing, right? So, a very rigid platform that has, you know, really good ability to attach a telescope to, you know, ability to kind of move around very quickly, everything you want from that. If you go into a much larger platform, you lose that ability to move around. So, it's really not about mass or size, it's about application. So, for EO applications, Aries is great. For things where you're looking at a wider swath of the Earth, so I think missile tracking, missile warning, carrying space interceptors, other types of instruments like that, Nova's a great middle ground. For really big payloads, if you're doing things like radar or communications or that, that's where you really don't need to be so agile and you can kind of just float in place and do what you need to do. So, it depends on application.
So I want to talk a little bit about sort of the state of the market right now. The bus market in general, like where do you think it sits today in terms of undersupplied, oversupplied? Basically the supply-demand side. Like, how... I mean, there are a lot of bus providers out there. This is not... your model is obviously different than many of the other kind of more traditional players, but like talk to me about, like, you know, if you need a bus right now, how easy is it?
It's a great question. So, and look, you guys have talked many times about like, are there too many providers on the market? What does it look like? And what I would just say is the analogy I would make there is that's like saying, are there too many modes of transportation in the world?
It's like you're comparing a bicycle with a motorcycle, with a car, with a train, with an airplane, with like somebody walking. And it's like you can't compare apples to oranges. So, what I would say is, like, to answer your direct question though, how hard is it to get a bus? If you want to go get a satellite bus and you want it quickly, so let's say in a matter of months or weeks, you go tell me who you could go buy that from. I can tell you right now, I could go look at our production board over there, but if you want to buy one from us, you go on our website, put down a credit card payment, I could literally have you before you leave LA, you know, in early July. You could be going back to New York or Austin with a satellite bus, right? In a matter of weeks.
And I would argue that we are the only provider. Everybody else you're looking at years.
All right, we'll talk about that and the manufacturing side.
Are you ready to buy one?
Yes, I might be. I got to think about the application and what the corporate card limit is, but...
So, okay, but let me... I've had conversations with a number of different folks about this, and I'm curious like what you think about this statement, which is globally the market is oversupplied, domestically it's undersupplied. Do you... I'll just put that out there. What do you think about that? And let's just kind of focus on the US when I say domestically.
So I guess like at first glance, I would say I don't feel like that is necessarily accurate. And the reason that I would say that is we have customers in the US and overseas.
And it's similar like if you were to go to a US firm and say, 'Do you want to buy from the US or buy from an international firm?' A US firm always wants to buy from the US.
Internationally, people usually want to buy from their home country or their region. And yet people are buying from us because there is a lack of that supply out there and a lack of the capabilities that I think that we have offering.
So what I would argue is given that a decent chunk of our revenue actually comes from a global basis, there probably is the need, or there's a lack in the market both internationally and domestically. That would be the data point I would point to.
Sure. Okay, well then let's talk about the market as far as like applications, right? So like you have Starlink, that's right. You have, you know, SpaceX's orbital compute satellites, you have Kuiper. I'm just naming the constellations that are the mega-size constellations that are most likely viable and will be executed on over the next like, call it, five to ten years. That, you know, if you follow the FCC applications and filings, it's like, you know, a million...
Of course. And you can't look at that, right? Because like there's a lot of... you tomorrow could go file for payloads on, you know, a constellation.
Of course.
So from your perspective, like where is the biggest opportunity for Apex both on the commercial side and on the national security side? How do you break that down?
Yeah, so the way that I see it is like there's a sweet spot where we tend to operate. So if you have a mega constellation of 10,000 or 100,000 or a million satellites, frankly like you probably shouldn't buy from us. There's certain cases where maybe you should, but like by and large you probably want something that's like super custom to your design. The analogy I'll... I'm full of analogies today, but in my automotive analogy, it's like take for example the USPS delivery trucks, right? They basically had Oshkosh make them a very unique design for their very unique set because they need a bunch of vehicles that do something super specific. So they had to basically custom car made. Yeah. But for all the other applications, right, Ford or Toyota are able to produce a bunch that are used for extensible purposes. So, for the mega constellations, like by and large, like we're probably not the ideal fit. On the other hand, if you only need one or two satellites and you have something that's like a class A or class B pretty bespoke mission, we're also probably not the right fit. Where we really shine is for the, I would call it like small, medium, and large constellations where you need single digits or dozens of the same vehicle very rapidly to basically constitute your mission. So, think about it this way, right? I'll give you examples. I'm not saying these people are customers, but examples of like constellations that would be in theory a good fit for what we're doing. You look at a company like Vantor, right? That launches like constellations of, you know, dozens of the same satellite that are being used for commercial company, but they're being used obviously for government purposes. That's one really good example. On the Earth observation example, another really good example is a great company like Hawkeye 360, right? They just launched, I believe, yet another wave of satellites. It's kind of the same thing over and over and over again for their unique mission case. They're not buying tens of thousands, but they're on the order now of getting close to 100, 100-plus where this kind of model could make a lot of sense. You could look at other mission sets as well. So, let's talk more government. Missile tracking, right? That one is very easy to talk about because of Space Development Agency and PWSA. But over the years, right, hundreds of satellites, transport layer, hundreds of satellites where this kind of thing that we're building here at Apex would be a really, really great thing.
When do you think that a company should utilize an Apex versus building their bus in-house?
So, if speed is of the essence and getting a set of systems up quickly is what matters, 100% you need to be... If you're not using Apex, right, you're going to lose. Is the simplest way to do it. We call ourselves a spacecraft platform company, and if you need something that's super custom and super bespoke, like, yes, you probably shouldn't use us, but that's also such a narrow mission set that like, I don't know how viable that is. But if you need to get your system on orbit quickly because it is an imperative national security mission and it's critical for us to win in the space race we're in the middle of, because you're a commercial company that needs to generate revenue, or there's some other key thing that you're doing, some scientific instrument, you need to be using Apex, otherwise on a speed basis, somebody is going to swoop out from under you and they'll go use us, and you're going to end up losing.
What sort of... what's the moat that you're building right now that allows you to say that? That statement.
So, there's two core things that enable us to basically move at the speed that we're moving. So, one of that is the vertical integration of the actual hardware on the systems. And we've intentionally been pretty quiet about this from the beginning, and now over time we're becoming more outspoken about it, but the plan has always been to basically vertically integrate every part of the satellite just over time.
We work with suppliers where we can, but at the volumes that we're now hitting out of this factory, you can't work with those suppliers and you need to go vertically.
What are those volumes right now?
Like the building that we're in now was designed to be at over 200 per year. We're not doing 200 per year, per day. We have one of the four production lines in place, but that tells you kind of about where we're at today. The second key though was not just vertical integration, because that's all supply chain. It's how do you actually design a system and build it as quickly as you need? And that secret sauce is a system we call Octopus. If you can't tell, we like animals here. We call it Octopus. It's software, so, you know, you should appreciate this. This is a software guy. But it's effectively a cross between an ERP, an MES. Really, we call it the Apex operating system, and it's like truly all those and more, and the entire company runs on Octopus. So, literally from deciding how many of what satellite we're going to build to our entire supply chain, to work instructions on the factory floor, to telemetry coming off satellites in orbit, everything is based on Octopus, and that is what really allows us to move at that speed. Software-enabled manufacturing.
So, so I buy the commercial customer kind of template-sized model, but what about government? Because so much of the request can often be quite bespoke.
And they're often, you know, as most folks say, like the most challenging customer to work with, especially when it comes to, you know, this type of bus building. Like, how have you maneuvered around that?
Yeah. So, we're a dual-use company, right? We're supplying... The way we think about it is three major markets. We have commercial, we have international, but the largest of the market by far is actually US government. Now, we typically sell to the major defense primes. What I can say is every single major defense prime except one is a customer of Apex.
Which we're very, very proud of.
And that one who's not, I think soon will be, so just give it time.
But we're very proud of that, right? We have become a true trusted supplier to not just the defense industrial base, but also direct to government.
Yeah.
Now, I have a quick... sorry, quick question on that. So, like, you know, without naming names, like some of those primes have their own bus-building capabilities.
I'd argue pretty much all of them.
Pretty much all of them. Like, what does that tell you? What does it tell you about you or maybe the market?
Right. So, it's not... Listen, those primes have amazing capabilities on payload, on buses, and other things. The market that we go after, this is similar to your point of are there too many bus companies, the market we go after is not the market that they're using their in-house buses for.
Fundamentally different applications and different mission sets. If you need... Take an extreme example, a James Webb Space Telescope, right? Super classy system. Please do not buy an Apex bus. We are not the right fit for you.
But if you need a repeatable system where you need a lot of these systems fielded very quickly, we are the ideal fit for you. Right? Like you could look at our most recent announcement with Northrop Grumman.
So, when you think about your kind of business model over time, you're selling buses now. Do you see yourself making... Now, there's sort of a... I won't call it a paradox, but there's a bit of an interesting component through line throughout your business model, which is like your goal ultimately is to standardize. Yes. And I don't know how often you use this term yourself, but I've heard one of your customers use this before, which is like the goal is to commoditize the bus.
Right? And ultimately that's a good thing, but it's a double-edged sword.
So, when you look out into the future, like do you think the ultimate money that Apex will make is from the commoditization of the bus or by owning sort of the complete mission?
It's a very good question. So, I will say first on the word...
Also, what I'm getting at is when are you getting into the payload business?
