FT: Poland to acquire stake in satellite firm Iceye

Poland is set to buy a stake in satellite company Iceye, known for tracking Russian troop movements ahead of the 2022 invasion of Ukraine, as part of a broader effort to bolster defence capabilities in response to growing geopolitical tensions.

Iceye CEO Rafał Modrzewski said Warsaw is in the final stages of negotiations to acquire equity in the company, though he did not disclose the size of the investment. The deal will be made through Poland’s state development bank and follows a $230 million deal in May for up to six Iceye satellites, Caliber.Az reports via Financial Times.

Founded in 2014 by Modrzewski and Pekka Laurila, Iceye initially provided radar imagery to Arctic shipping firms. Since Russia’s full-scale invasion of Ukraine, it has shifted focus to military applications. The company’s valuation has grown “significantly higher” than $1 billion, according to Modrzewski.

Modrzewski told the Financial Times that Iceye aims to expand its production capacity at least fourfold to meet soaring demand.

“Europe doesn’t have the time now for us to just grow organically,” he said. “We’re going to source more financing in order to supercharge the growth of the manufacturing capability so that we can manufacture more, faster and ultimately fulfil the demand.”

Iceye’s satellites use synthetic aperture radar (SAR) technology, enabling image capture at night and through cloud cover — a crucial advantage over conventional optical satellites. The company has launched 54 satellites to date, each costing about $20 million to produce, with roughly half operated by national defence forces, including those of the Netherlands, Finland, Brazil, and Portugal.

Iceye has established partnerships with BAE Systems, UAE’s Space42, and Germany’s Rheinmetall. The Rheinmetall joint venture, announced in May, will give Iceye access to Germany’s rising defence budget and integrate its systems with Rheinmetall’s weaponry.

Modrzewski noted that Iceye’s pivot to defence followed the collapse of the Arctic market due to sanctions on Russia.

“Would defence markets stop existing if the war in Ukraine ends? No . . . Growth in the [European defence] spending is so huge that it will take a while before that market gets overtaken by anything else.”

The company plans to scale up from manufacturing 25 satellites annually to between 100 and 150, which Modrzewski said will require “substantial additional capital” beyond the Polish investment. Previous backers include BlackRock, OTB Ventures, Seraphim Space Investment Trust, and public entities like the European Investment Bank and Finland’s Solidium Oy.

Most of Iceye’s launches have taken place from US sites, but also from India and New Zealand. It operates production facilities in Finland, Spain, Greece, and the US.

Addressing growing competition in the SAR sector, Modrzewski said: “They aren’t building as good satellites, nor do they have as many. It’s not that straightforward for a company like Airbus, which is used to a certain style of product development, to suddenly entirely switch the ways of doing business.”

He acknowledged that Iceye satellites, built using cheaper components and lighter testing, have experienced failures, but emphasized the company’s resilience.

“Our satellites fail more often than the big ones, yes,” he said. “But because we have a large constellation, we can immediately replace a failed satellite with another. From the customer’s perspective, that translates to 100 per cent reliability.”

By Sabina Mammadli