CEO Interviews

Bluefield – Global Methane Gas Detection from Space

Bluefield is a startup focused on developing a global methane gas change detection and analytics platform via deployment of a series of micro satellites.  Each satellite will have a sensor to monitor methane, a valuable commodity (as the primary component of natural gas) as well as an extremely potent greenhouse gas with 100 times the climate change potential of carbon dioxide per volume.  In organizing a constellation of 20 satellites, Bluefield will be able to measure, analyze, and transparently report methane gas emissions for industry verticals interested or compelled to monitor and reduce the generation of methane gas.  Targeted industries include:  oil and gas, livestock, mining, financials, government, scientific communities, and non-profits.

Present options to evaluate methane gas emissions by airplane, drone, and ground surveys are all expensive, time consuming, and laborious.  To put these activities into context, their cost is approximately USD $12 billion annually and this accounts for only 5% of polluters and provides measurements only on a quarterly or biannual basis.  To extrapolate these numbers to provide this frequency of coverage for 100% of polluters, the global cost would rise to USD $240 billion.  Bluefield estimates they can develop their platform – sensors, artificial intelligence platform, 20 micro satellites fully deployed and operational, human capital buildout – for approximately USD $80 million in order to provide daily monitoring and analytics. 

Bluefield’s secret sauce is their combination of a proprietary methane gas sensor, artificial intelligence platform, and capture level of data.  No other startup or established company has this combination of attributes to drive innovation, reduce cost, and provide continuous daily detection on a global basis. Bluefield’s sensor utilizes a spectral optic filtering technique that compares the spectral signature of gas emissions from the Earth’s surface with a cell containing a sample of methane, allowing methane emissions in the frame to be detected simply and accurately. Resultant unstructured data sets are directed into an artificial intelligence platform for training, evaluation, and analysis. 

The sensor is currently being tested in the lab, and beginning in Q1/2018 the firm will begin developing a more robust design blueprint for airborne testing and then for space environments.  The team argues this measured approach will help uncover potential scaling and platform challenges and mitigate risk.

Bluefield’s pricing approach will focus on fee-for-service, reflecting the needs of different industry verticals for visual and other analytics, as well as, the extent to which governments legislate changing behavior over time.  For example, firms in the fracking industry might want to evaluate their sites on a quarterly basis while livestock farmers or cooperatives may need weekly reports.  Hedge funds might want daily detection data.  So, the team expects purchasing sizes, their frequency, and terms of use to vary and grow over time.

Bluefield argues their buyers will be a combination of emissions or data analysts whose role is to evaluate a firm’s methane footprint and a director/VP with the authority to make financial commitments.  Early leads have come from meeting analysts at emission and technology conferences and word-of-mouth.  Senior leadership or C-levels are not the firm’s sell focus.

The competitive landscape for broad detection and analysis using large and small satellites is at once dynamic, fragmented, and weak, depending upon the strategic focus a firm adopts.  Bluefield’s literature highlights two potential competitors:  GHGSat and Trompomi.  GHGSat’s focus is greenhouse gas (GHG) and air quality gas (AQG) emissions for industrial sites.  They have one micro satellite in orbit – affectionately called Claire – and a second in development.

In theory, this strategic approach offers more leaping points for action based upon more datasets. However, as a consequence this approach is far more data-intensive, which increases bandwidth requirements and adds challenges for producing real-time, actionable information for a specific pollutant. For example, Bluefield claims that its sensor will be 100 times as precise for methane than GHGSat’s multi-pollutant approach. Still, GHGSat is betting more equals more.  Broader based data and visibility of GHG/AQS emissions will logically lead to greater action – and greater long-term profitability for the firm. 

Tromponi (TROPOspheric Monitoring Instrument) is a methane sensor attached to satellite Copernicus Sentinel-5.  Presently undergoing calibration and testing, and developed in conjunction with a number of European partners, including the Dutch government, Tromponi will monitor methane emissions.  But the sensors purpose, along with additional sensors monitoring other gases – ozone profiles, sulphur dioxide, aerosol levels – is more scientific in nature. Thus, it provides readings with a resolution measured in kilometers, which may be suitable for high-level analysis of climate change, but not the resolution measured in meters which Bluefield provides and which companies require to precisely locate and fix a leaking gas pipeline, for example.

Other firms in the space industry, such as DigitalGlobe, Capella Space, and Planet focus on space/earth imagery, while Spire and exactEarth focus on global asset tracking.  ICEYE’s strategic energy is directed at micro satellite imaging using synthetic aperture radar (SAR) and Orbcomm, once a satellite communications firm, has redefined itself as an industrial internet of things (IIoT) and machine-to-machine (M2M) solution provider after a string of acquisitions.  Their glassdoor profile suggests a measure of heartburn in these transitionary efforts.

Taken as a whole, Bluefield’s satellite competitors are predominantly focused in other areas, struggling to solve technical or integration challenges, or government entities with different strategic objectives. 

Since their founding in 2016, Bluefield has accepted funding from one outside partner, Unshackled Ventures.  Known for providing early stage seed capital only to firms founded by immigrants, the firm is comfortable wading into new opportunistic waters.  In Bluefield’s case, the capital firm was very familiar with cloud based AI platforms, primary target audiences, and the challenges around scaling.  They were not as familiar with the satellite industry, but were interested in learning about it.  Many venture capital firms often stick to their core knitting skills when presented with a startup with a substantial hardware component to their business model.  After some lengthy discussions, founder and CEO, Yotam Ariel, felt Unshackled Ventures would be a strong addition to the team and a deal was reached.

Bluefield’s challenges are significant and the team did not hide from them during our two interviews.  As a year old startup, the interlocking pieces – technology execution, funding, human talent, clients, partnerships – all jostle for time and attention.  2018 will be in important year to validate their sensor in two unique airborne environments and develop a more robust software and AI platform.  Bluefield’s funding requirements for its next steps are larger than many, reflecting the satellite component of their business model and needs around time to market.  Commitments at this stage, based on existing venture capital patterns, are typically around $3 million.  Bluefield is looking for $15 million to get the first sensor/satellite into orbit.  A significant challenge, one that will require financial partners with an appetite for some outside thinking, but not insurmountable.  However, given the impact of their approach to methane gas detection and global climate change measurement, one could argue the costs to fund Bluefield to completion really amount to nothing more than a rounding error compared with the costs supporting the status quo and the negative impact of growing global methane gas emissions.

As a strategist, I find Bluefield compelling for a number of reasons.  First, they are focusing on a meaningful problem – global methane emissions – that has a clear market opportunity – the detection, management, and reduction of these emissions.  A number of industry sectors – all with established participants – have compelling reasons to purchase methane detection data products and insights to save money, make money, mitigate risk, improve operational performance, and solve compliance requirements.  Bluefield’s strategic focus and beachhead is directed at the specific – finely honed methane gas detection and its ongoing measurement  – as well as the industry actions for success.

Second, the motivation for the startup – Blufield’s “why” – is to combat global climate change and keep earth cool, as their tagline states.  Most firms of any size struggle with this question, but the team has this clearly defined.  The team also understands their “how’ and “what” now and what they need to accomplish over the next 24 months. 

Third, they do not plan to accept funding from potential industry partners, unlike GHGSat, which accepted funding from Schlumberger, the global oil services firm.  This will give Bluefield a freer hand as they scale their sales activities, sell their mission, build their brand, and avoid potential conflicts of interest – perceived or otherwise. 

Fourth, with their platform, Bluefield has the potential to become a real thought leader in the space, backed by compelling analytics and customers who have a vested interest in moving the needle – their own and seeing others do the same.  Once fully operational, Bluefield will effectively be pulling the bed sheets back on anyone emitting significant quantities of methane gas worldwide.  With all offending parties in the buff for friend or foe to see, there is a strong likelihood of behavioral change. 

Finally, and more broadly, monitoring methane gas emissions could serve as a proxy for more accurately evaluating economic growth.  Particularly in some global growth markets, the official growth figures often have little credibility.  For example, Chinese party officials admit their economic growth figures are not based in reality.  So, forecasters often use energy production and usage as a proxy.  But, these forecasts are imprecise and reactive.  Now, there should be another tool to gain insight into a country’s or a region’s economic growth in the areas of energy, livestock production, human migration, and other consumption patterns that generate methane gas.  Middle income countries typically see a significant spike in all of these areas.  In time, Bluefield’s detection technology and data insights could prove to be of significant value in this arena and to the company’s bottom line.

Like all of you, I look forward to seeing how Bluefield progresses over the coming year and talking with them again at the end of 2018.

Stay tuned.

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