Re-imagining satellite navigation: Why we invested in Xona Space Systems

Navigation is a critical service for the global economy and plays an important role across consumer applications, such as mapping and ride-hailing, and industrial sectors from logistics to agriculture. However, the infrastructure underlying navigation, the Global Navigation Satellite System (GNSS), exhibits several weaknesses, as recently highlighted by widespread aviation disruptions due to GPS jamming.

This is why, we at NGP Capital, are thrilled to announce our investment in the $19M Series A round of Xona Space Systems together with Future Ventures, Seraphim Space, and existing investors. Xona is developing a low earth orbit (LEO) constellation of positioning, navigation, and timing (PNT) satellites, designed to complement and enhance the capabilities of existing GNSS infrastructure through unprecedented accuracy, reliability, and security. Over the past decade, we have reviewed hundreds of companies in the domain of space technology, and this marks our first investment.

In this post, I will explore the deficiencies of current satellite navigation systems and discuss why Xona is uniquely equipped to address these issues by launching the first commercial satellite constellation for navigation.

The Global Navigation Satellite System is foundational for the global economy

The initiative to develop the first navigation satellite system, known as the Global Positioning System (GPS), was launched in 1973 by the US Department of Defense and became fully operational with 24 satellites in 1993. These satellites orbit in medium earth orbit (MEO) at an altitude of approximately 20,000 kilometers. Since then, other nations such as the EU, Russia, and China have developed their own GNSS constellations: Galileo, GLONASS, and BeiDou, respectively.

Satellite navigation delivers immense economic value and powers many critical use cases. According to Euroconsult (2023), out of the approximately $400 billion of value generated by the space economy, satellite navigation represents 63% or about $260 billion (compared to satellite communications, 35%, and earth observation, 1%). Today, there is an installed base of over 6 billion devices that utilize GNSS technology, and this number is projected to exceed 10 billion by 2030 (EUSPA, 2022).

GNSS has become a highly successful and ubiquitous public utility, and the signal is freely available for anyone to use. While the signal is free, it is often overlooked that the capability to receive and process the signal is not as it requires user equipment (e.g. GNSS chips and receivers) that is often specialized and costly.

Existing GNSSs inherently suffer from multiple deficiencies

After speaking with dozens of industry experts regarding the current state of GNSS, we have learned that since the launch of the first satellite navigation service, there has been remarkably little innovation in the core infrastructure, namely the satellites and the signal. GNSSs continue to suffer from several issues.

First, the signal is highly susceptible to jamming and spoofing. GNSS jamming has recently received extensive news coverage, particularly in Europe, where suspected Russian jamming campaigns have caused significant disruptions to aviation, resulting in delayed and canceled flights (see for example here). However, GNSS jamming can also take other more surprising forms: for example, truck drivers wishing to obscure their location and routes from employers sometimes use mobile jammers, inadvertently affecting nearby other receivers as well (as observed in an instance in France, see here). Spoofing, another type of attack, involves sending counterfeit data to deceive the receiver into believing it is in a different location. This is possible since civilian GNSS signals are unencrypted and lack authentication.

Second, the accuracy of current GNSS is only 1-5 meters under optimal conditions, however, obstacles, atmospheric variations, and other factors can decrease accuracy and extend the time to reach accuracy (i.e. convergence time). To mitigate this, critical industries such as automotive, agriculture, and emergency services utilize specialized high-precision GNSS receivers along with software-based GNSS correction services to attain centimeter-level accuracy.

Third, the signal strength of GNSS is weak, making it vulnerable to deflection or blockage by trees, buildings, and other obstacles – the reason for your unexpected pickup or delivery location! Moreover, the low signal strength impedes penetration through walls preventing indoor navigation.

Finally, systems like GPS and Galileo operate with only about 30 satellites each and require a minimum of 24 to fully function. This renders them susceptible to threats from hostile nation-states that could incapacitate parts of the infrastructure.

To mitigate these issues, a multi-billion industry has evolved to provide supplementary technologies such as inertial or vision-based navigation systems and enhanced GNSS systems like Real-Time Kinematic (RTK), which help improve reliability and accuracy in critical use cases and challenging environments. However, these systems often have their own limitations, such as geographic restrictions and several orders of magnitude higher costs than consumer hardware ($10k+). They also fail to solve the fundamental problem of a low signal power, and typically need ideal conditions to work properly.

Xona is pioneering the next generation of satellite navigation systems

Xona was founded by eight co-founders who met while studying aerospace engineering at Stanford University. We met Brian Manning, the CEO, and Tyler Reid, the CTO, back in 2023 and were immediately struck by their deep domain knowledge, clear vision, and passion for tackling such a challenging problem. Before founding Xona, Brian worked for SpaceX, where he was responsible for designing the thrust structure for the Falcon 9 rocket. Tyler, on the other hand, completed his Ph.D. at Stanford’s GPS Research Lab, authored seminal papers on LEO PNT, and subsequently worked in Ford’s autonomous driving division.

Xona is developing a LEO satellite constellation that will orbit at an altitude of approximately 1,000 kilometers (20x closer to existing MEO systems). Due to its proximity to Earth and innovative signal technology, Xona addresses all the major issues of current GNSSs. Xona's technology promises to deliver approximately 100x better accuracy (centimeter-level), faster convergence, and over 150x the signal power, making it resistant to jamming and enhancing penetration through obstacles and walls. Additionally, Xona incorporates security features that effectively mitigate spoofing. Early approaches that attempted to build this service have required entirely new chipsets and receivers. However, the Xona team chose to prioritize user adoption from day one by building their service to be compatible with existing user equipment, which dramatically reduces the cost and complexity.

To scale the solution globally, Xona has established a strong ecosystem of partners and customers, including leading chipset, receiver, and simulator manufacturers such as Hexagon/Novatel, STMicroelectronics, Spirent, and Safran. It’s clear from our conversations with Xona’s partners and customers that the market demands a more robust, accurate, and globally available navigation service. This is particularly the case for critical use cases such as autonomous systems, aviation, drones, agriculture, automotive, and defense, where high performance and reliability are paramount.

What if satellite navigation was precise and robust?

At NGP Capital, we have a longstanding history of investing in the beneficiaries of GNSS services such as mapping, mobility, and logistics, with investments in companies like Moovit, Lime, and Shippeo. We believe Xona is a transformational company that, over time, will enable the creation of entirely new consumer and business applications. We look forward to seeing how industrial companies and developers leverage this technology to unlock innovative, previously unimaginable, applications.

We are thrilled to partner with Xona on this journey and extend a warm welcome to the entire team as they join the NGP portfolio!

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The end! If you have any feedback about the post, or would like to discuss further about space technology, feel free to reach out at ossi@ngpcap.com.