Protostar – Profile
HQ: Bermuda, but everyone works out of San Francisco.
Management: President/CEO is Philip Father (peculiar name). Father was CEO of Gemini Consulting, where he worked on a number of satellite deals including DirecTV. His bio leaves the impression that Father has never run a company before, has been doing flaky consulting gigs for too long, and is self-conscious about it – his bio trails off: “Many times Mr. Father provided bridge management services to achieve overall client goals.”
Investors: In March 2005, New Enterprise Associates and SpaceVest invested an undisclosed sum in Series A. However, the chairman of the company says that they are funded to develop 3 satellites. We suspect funding is at a very high level, but perhaps the company must meet certain milestones to get access to the next pile of cash.
Business Model: ProtoStar is an operating company for geostationary satellites required for direct-to-home (DTH) satellite TV and broadband Net access for the Asia-Pacific markets. The planned footprint would reach over 3B people in India, Indonesia, China, Taiwan, the Philippines, and South East Asia. Protostar expects to launch its first satellite in 2006. The company’s positioning is that even if it gets a small share of the TV market in Asia, they’ll be stoked.
Competitors: Intelsat, PanAmSat.
Dirt: This is a very odd venture capital play. The exit strategy is long term, VCs haven’t historically invested in this market, there are huge regulatory unknowns, and the members of the management team are not proven entrepreneurs. It brings to mind other satellite long-shots like Iridium, a colossal waste of money that never lived up to its promise. These caveats aside, Protostar’s opportunity is fairly straightforward and relies on an existing business model that has been proven time and again. There is pent-up demand for TV and Net access in Asia, and failure is somewhat cushioned by the huge insurance policies that satelites are required to take out.