Charter Space raises $5M to insure satellites nobody else will
The El Segundo broker says it now serves more than 50 space and defence companies. Its pitch is that conventional insurers will not price a satellite.
Charter Space has raised a $5 million seed round to expand a brokerage that sells insurance to space companies.
Crystal Venture Partners, which invests in insurance, led the round. QED, Blank Ventures, Hustle Fund and Gaingels also took part. Gaingels is a syndicate that backs startups with underrepresented leadership.
The company has raised $8 million in total.
Charter Space launched its nationally licensed brokerage in May and says it is already servicing more than 50 companies across the United States space and defence industrial base. That figure is the company's own.
The gap it is selling into is an underwriting one. Things go wrong in space constantly, and operators plan for it, but actually insuring hardware that leaves the atmosphere remains rare.
Founder and chief executive Yuk Chi Chan attributes that to the cost of underwriting an object like a satellite. Charter Space's own website puts it less politely, saying ordinary insurers "heard a bunch of scary science words and freaked out".
Chan started the company with co-founder Yukun Yin to build centralised software for aerospace engineering, pulling technical, manufacturing and test data into one place. He then concluded the same data was worth more fed into underwriting.
The commercial logic matters more than the hardware. An uninsured satellite is an asset no lender will touch, which leaves the operator dependent on equity.
Chan made that argument to TechCrunch last year, saying insurance coverage would let space companies raise debt and credit rather than relying on venture capital alone.
The market exists at all because the customer base changed. Space was long dominated by governments and defence primes that moved slowly. The arrival of cheaper launch, driven by SpaceX's Falcon 9, produced enough new satellite makers, spacecraft builders and rival launch providers to support a specialist broker.
SpaceX is due to retire the Falcon 9, and new launch companies are competing for the work it leaves behind.
The seed money goes on the sales team and on new lines of cover. Charter Space says it is looking at policies for what it calls novel mission concepts, including space-based nuclear power, lunar missions and in-space servicing of other spacecraft.
For founders outside space, the transferable point is the one Chan is betting on: a sector that cannot be underwritten is a sector that cannot borrow. If your industry is too strange for an insurer to price, your cost of capital is set by equity investors alone, and it is set high.