Met Moon Jae-in... Finnish Startup Supporting Ukrainian Military [Corporate Research Center]

ICEYE, a Leading Microsatellite Developer
World-Class 25 cm Resolution
Providing Satellite Data to the US, Ukraine, France, and More

Editor's NoteSouth Korea ranks 2nd in the world for corporate research and development (R&D) expenditure (2022) and 4th in the number of patent applications filed in the United States (2020). However, the productivity growth rate of companies has significantly declined from an average annual rate of 6.1% during 2001-2010 to 0.5% between 2011 and 2020. This is because the productivity growth of ‘innovative companies’?those actively engaged in innovation activities?has slowed down. Without change, companies will be ignored by the market. To help the industry regenerate its innovation DNA, we examine innovation cases pioneered by renowned overseas companies. Innovative companies will be the catalyst to boost South Korea’s stagnant economic growth rate.

"We aimed to do not something difficult, but something deemed impossible."

Raphael Modrzewski, co-founder and CEO of ICEYE, a leading micro-satellite company headquartered in Finland, recently told Asia Economy in an interview that the early skepticism about a university student-led startup succeeding in the space industry was "natural."

ICEYE develops synthetic aperture radar (SAR) satellites that capture satellite imagery. SAR uses radar bandwidth to create images of objects on the ground. ICEYE’s SAR satellite resolution is at the world’s highest level, with a 25 cm-class resolution. This means it can recognize objects as small as 25 cm by 25 cm as a single pixel, allowing observation of most objects on the ground.

A small satellite developed by ICEYE floating above the Korean Peninsula. (Provided by ICEYE)

Since launching SAR satellites in 2018, ICEYE currently operates around 40 satellites, forming the world’s largest satellite constellation. It can deliver information about the Earth from satellites within 30 minutes and repeatedly capture the same area every two hours. Its ability to detect changes in real time differentiates it from large satellites.

The small but significant change of a startup developing and launching SAR satellites for high-resolution Earth observation began at the Aalto University research park in Finland. Modrzewski said, “The motivation was simple,” adding, “Despite many problems to solve, the established space industry was complacent.” He criticized the space industry at the time as “too slow and expensive” and “too lazy.” While attending a technology venture program jointly run by Aalto University School of Business and Stanford University in the U.S., Modrzewski and co-founder Pekka Laurila thought, “Maybe we can create something more flexibly,” and decided “we could achieve it.”

Although their academic advisor was skeptical about the business, he did not stop their passion to launch satellites. In 2015, U.S. oil company ExxonMobil invested $20 million to develop small radar satellites, which led to the creation of the company name ICEYE, combining ICE and EYE. ExxonMobil, interested in monitoring Arctic sea ice movement to transport oil, took notice of the startup located in the Finnish research park.

Rafal Modrzewski, CEO and co-founder of ICEYE. Source: ICEYE website

Generally, satellites bring to mind massive launch vehicles weighing over 1 ton, but ICEYE’s satellites weigh only 120 kg and measure just 0.25 meters. The manufacturing period takes only a few months. They even innovatively used a tape measure as a component to deploy folded wings on the satellite. ICEYE transformed the traditionally large-scale, government-led space projects into a compact business model feasible for public-private partnerships. Their belief in “we can do it” changed the paradigm of satellites.

ICEYE has even started building satellites while negotiating contracts with countries and delivered satellites the day after signing agreements. While manufacturing satellites on order, ICEYE also provides regional information through leasing. They collaborated with the Ukrainian Ministry of Defense to provide satellite images showing Russian military movement routes.

Thanks to their success, the Otaniemi area, where Aalto University’s research park is located, has become known as the ‘European Silicon Valley.’ In 2019, former President Moon Jae-in visited Aalto University with then Minister of SMEs and Startups Park Young-sun to benchmark the startup industry and met with CEO Modrzewski.

ICEYE, which once rented a single classroom inside Aalto University, has now grown to occupy an entire research building as its office. Besides its U.S. subsidiary, it has signed contracts with Greece, the Netherlands, Brazil, France, and others. According to market research firm Statista, ICEYE’s revenue increased nearly tenfold from 9.45 million euros in 2020 to 89.652 million euros (approximately 142.7 billion KRW) in 2023. During the same period, the number of employees more than doubled from 235 to 575.

As the company grew, the nature of its concerns changed. Modrzewski said, “In the early days, our worries were simply binary?whether the satellites we built would work or not.” Now, he said, “the challenges have become more humanistic.” He explained, “There are different kinds of challenges such as harmonizing with cultures encountered during overseas expansion, maintaining speed amid chaos, and not losing focus amid explosive opportunities arising everywhere.” He added, “Successful organizations often become targets of attacks. Complacency is the enemy. We must create our own system while keeping alive the spark that brought us this far.”