Crosscut Ventures
May 11, 2018 · 3 min read

CrossCut is excited to announce that we made a moonshot (literally) investment in Umbra Lab. CrossCut invested in Umbra Lab after the two founders had made a significant personal investment to design, develop and build their core IP. This time allowed them to understand the market and their customers while designing a totally unique small format satellite (SmallSat).

In the early days of Umbra Lab, the founders received good advice from a prominent VC, “Go as long as possible without venture money.” CrossCut became involved at an inflection point when Umbra Lab was ready to scale with serious venture dollars.

Had Umbra Lab received venture funding from the beginning, their satellite would look a lot like a typical “new space” radar satellite, forcing them to compete with existing and upcoming systems. The founders made a difficult choice to innovate (a design that could deliver sub .25 meter imagery) rather than compete (with today’s satellites delivering 1-meter resolution imagery or greater). Umbra Lab’s innovations have awarded them an unfair strategic competitive advantage in commercial remote sensing: The world’s only radar imaging satellite capable of producing .25 meter (10-inch) resolution imagery and higher.

Umbra Lab’s mission costs are in the low single digit millions and by using synthetic aperture radar (SAR), their system can take pictures at night and through clouds. Data of this quality is a quantum leap over any existing satellite, including multi-$100m dollar nation-state level satellites.

Umbra Lab’s co-founders are wildly passionate about the space industry, their technology, and their customers. Their fire is intoxicating, but their pragmatic approach to engineering and significant previous experience with radar and antenna design gave us great comfort that their technical milestones could be achieved. After first speaking with Gabe Dominocielo, Umbra Lab’s co-founder, I was inspired to spend a few weeks getting to know Umbra Lab and their very different vision of the future “new space”. I spoke with experts from JPL/NASA, DoD and legacy aerospace who all agreed the satellite design was simple, elegant and easily achievable with Umbra Lab’s experienced team.

CrossCut is looking for investments across various categories such as big data, artificial intelligence and deep learning, transportation and logistics. After reading an obscure paper from MIT’s Lincoln Lab, “Automatic Target Recognition System in SAIP,” I started to connect the dots on how powerful their data set can be in both commercial and government use cases.

Lincoln Lab ran algorithms to automatically classify and identify large vehicles with SAR imagery taken from a drone at different resolutions. At 1-meter, they could automatically classify these vehicles 45.4% of the time, after improving the imagery to .5 meters the probability of correct classification increased to 95.4%. This was my light bulb moment. The largest flaw in big data is not just a lack of data, it’s also a lack of quality data.

Space-based .25 meter imagery can impact the future of how data is collected (airplanes, drones, humans) and how AI will interact with all data. Venture dollars have been pushed searching for software to compute a “golden algorithm” and have forgotten that the key to enabling great software is remarkable hardware and high-quality data sources.

We are pleased to announce our investment in Umbra Lab and look forward to helping the company grow. This is our first of what we hope will be several investments in what is being called the “new space” category. Thanks to SpaceX (and many other low-cost launch initiatives) and the CubeSat format (led by Planet), there seems to be a massive new opportunity to commercialize Space. It is definitely a high risk/high reward area of investment and we have enjoyed spending the last 6 months building relationships across the ecosystem. We have been thrilled to see incredible entrepreneurs and technical innovations exploding from the Southern California tech scene and it’s amazing aerospace legacy.

Crosscut Ventures

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The biggest seed-stage venture capital firm in LA, partnering with early-stage founders to build extraordinary high-growth tech companies across the US

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