Announcing Urban Sky’s $30M Series B: Conversation with Andrew Antonio, CEO of Urban Sky, and Andrea Hippeau, Partner at Lerer Hippeau
We first invested in Urban Sky in late summer 2023, when co-founders Andrew Antonio and Jared Leidich came to us with a really compelling idea — that microballoon technology could fill a fundamental gap in the supply of high-resolution aerial imagery.
Today, Urban Sky is announcing a milestone $30 million Series B round, and we were glad to double down on our initial investment.
When we initially invested, we hypothesized that traditional aerial balloons were being overlooked as vehicles for remote sensing applications due to their relative lack of control and inability to fly over desired areas at specific times, and that that’s why we weren’t seeing promising growth in the space just yet. We argued that Urban Sky’s microballoon technology was capable of solving this problem. In the 18 months since our initial check, this thesis has proven true. Urban Sky is growing rapidly and impressively with many private contracts, including with the U.S. Department of Defense — and the company’s technology has been used in compelling pilots around monitoring wildfires, including in Colorado, and, more recently, the Pacific Palisades.
Urban Sky is the first remote sensing and aerial imagery company that is operationalizing the stratosphere. The company’s microballoon technology makes possible broad-area and high-resolution monitoring at data acquisition costs that are significantly lower than all other aerial platforms. That was true when we invested, and is even truer today as Urban Sky has solidified its positioning as the clear leader in this space.
I recently sat down with Andrew to talk about the raise, the state of the company, and what’s in store.
Andrea Hippeau, Partner at Lerer Hippeau: Let’s start by taking a step back. What’s the origin story here? How did you come up with the idea for Urban Sky? What was the eureka moment, so to speak?
Andrew Antonio, CEO of Urban Sky: I met Jared Leidich, my co-founder, in the desert of Roswell, New Mexico over a decade ago while we were working on Project StratEx, an experiment that actually broke the world record for the highest human balloon flight and sky-dive of all time. Jared was a major leader of the program — he led the spacesuit team on StratEx, and we became quick and close friends. StratEx was our introduction to stratospheric ballooning, and what a way to start. During that program, we were learning about and operating some of the largest and most complex stratospheric systems to ever take flight. After StratEx, a good portion of that team joined a new company called World View, where we were developing a stratospheric-balloon based space tourism system that would carry 6 passengers at a time to the edge-of-space to experience the “orbital perspective” or a perspective-altering moment. Jared and I had always wanted to do something together, on our own, harking back to what we learned during StratEx. During that program, we routinely launched small latex weather balloons with GoPro cameras and were amazed at the resolution of the photos and video. Seeing those early photos from weather balloons was our eureka moment, so to speak. The data wasn’t quite good enough for broad commercial utility, but we knew we could develop better, more advanced, small and affordable balloon systems and cameras that could routinely capture high-resolution remote sensing data that customers would want. That’s when we decided to dedicate ourselves to unlocking the value of routine and easy access to the stratosphere.
AH: I’d love to hear how you’ve been thinking about the past year and a half or so, since you announced your Series A round back in October 2023. What has that period been like for you and the team?
AA: The company has been on a rapid growth trajectory since we closed our Series A in October 2023. Since then, we’ve defined and built an entirely new category for our customers, which we call the “tactical stratosphere,” or rapid, controlled access to the stratospheric environment. In particular, we’ve received significant interest from the U.S. defense (DoD) and intelligence community, who view our stratospheric balloons as “personally deployable satellites.” Most of our focus over the last ~14 months has been on the refinement of our hardware (i.e., balloon systems) and software (i.e., mission control and flight planning). In practice, that turned into a 1-year+ sprint to improve our core technology. In that span of time, we’ve more than doubled the size of the team and more than tripled our revenue.
AH: More recently your microballoons were augmenting the wildfire response in the Pacific Palisades.
AA: Wildfires continue to wreak havoc on communities worldwide; the recent and ongoing fires in California are a tragic example of their devastating impact. At Urban Sky, we’re working hard to develop new technology to support wildfire detection and real-time, high-resolution fire mapping.
We think the stratosphere will play a vital role in the future of real-time wildfire mapping. We’re currently developing and actively testing a “Hot Spot” payload that will be paired with our stratospheric Microballoons to help address the wildfire problem. The payload is essentially a light-weight imaging system that can be deployed in less than ten minutes by one operator in order to capture real-time wildfire data without impacting active airborne firefighting efforts.
In the case of the Palisades fire, we deployed this sensor directly above the affected area in order to capture high-resolution infrared data, resulting in a heat map that is more than 100x higher resolution than publicly available satellite data. The mission resulted in the collection of more than 500 square kilometers of high resolution data within the fire zone.
Thanks to the high-resolution infrared imagery, the Hot Spot system enables firefighters to pinpoint the fire line. It can also hover over a fire for several hours. There’s more work to do, but we think the Palisades mission was an important step towards a future where stratospheric vehicles can actively support the early detection of wildfires.
AH: Urban Sky has also secured contracts with the Department of Defense, as you noted. The US Air Force recently awarded a contract for the manufacturing of microballoons. What are some of the defense applications for microballoons?
AA: The DoD views Urban Sky as synonymous with access to the stratosphere. We’ve really unlocked an entirely new airspace domain for DoD missions. This is akin to being the first or most prominent company that unlocked access to space and low-earth-orbit for the DoD. Urban Sky Microballoons can continuously change altitude and access opposing stratospheric wind layers to “station-keep” or loiter above target areas for days, weeks, and even months on end. This offers the DoD a “persistent, long-duration” platform high in the sky. Satellites, aircraft, and drones can’t hover over one location for extended periods of time, making the stratosphere the only airspace domain that offers this value. Additionally, because the stratosphere is so high up, it’s both extremely difficult and expensive for U.S. adversaries to combat and/or eliminate stratospheric balloons. Traditional and low-cost aircraft and weapons systems can’t reach the stratosphere, so the stratosphere offers the DoD an economically asymmetric airspace domain and platform capability.
AH: Can you talk more about the stratosphere? Why is it such an underutilized layer of the atmosphere? What are the advantages to unlocking the layer?
AA: The stratosphere is basically the high-altitude domain between satellites and aircraft. Today, it’s mostly used for weather data collection or upper atmospheric science and research. But it’s incredibly hard to access given the limited air density of the stratosphere, making it predominantly the domain of stratospheric balloons, which can fly gracefully within it, almost like an ice cube floating on water. While stratospheric balloons have been designed to offer a higher degree of navigation and steering, those systems are generally expensive (often millions of dollars to launch and operate). The absence of controllability at a low price-point has been a huge barrier for the development of a stratospheric market.
AH: I know sustainability is key for you and your team. What are some of the environmental considerations you keep top of mind as you’ve developed the microballoon?
AA: Reusability and sustainability is at the core of everything we do. Similar to SpaceX developing the first reusable rockets, Urban Sky is the first company in history to develop reusable stratospheric balloons. Before Urban Sky, every stratospheric balloon ever flown was one-time-use. We changed that dynamic, and expect to build upon that legacy of sustainability moving forward.
AH: How do you and your team leverage AI and machine learning?
AA: One of the hardest aspects of gaining routine and easy access to the stratosphere is predicting, with precision, upper atmospheric wind speeds and directions. AI is super helpful in that case. We’ve invested heavily in developing and leveraging AI to support stratospheric weather modeling, atmospheric predictions, and autonomous flight control of our systems. Weather and trajectory modeling is a big data problem, and the AI systems we’re building are helping us improve flight prediction accuracy and control decisions.
Outside of weather, AI will be critical in helping us to understand and analyze the vast amounts of Earth imagery data we collect from stratospheric Microballoons. In the future, we expect all LLMs to reference Urban Sky data, almost like a physical search engine for earth. For example, a question about how much you should pay for home insurance could be answered by querying decades of historical earth imagery to evaluate certain risk factors, such as environmental concerns. AI-based Earth Observation models will be critical to unlocking this type of multi-modal data querying and analysis rapidly in response to customer prompts.
AH: This Series B is a huge milestone for you and the team. Why raise it now?
AA: Our first and hallmark product — the Microballoon — is already well commercialized and loved by our customers. This Series B will give us the capital we need to build a broader, connected suite of products to unlock the full value of the stratosphere. We expect this new suite of products will include more advanced types of Microballoons, improved real-time imaging payloads, and software that will serve as the world’s first stratospheric operating system. We think of ourselves as building the SpaceX of the stratosphere, and this fundraise will help us lay the groundwork for that future.
AH: How did you decide who to go with for the Series B? What were some of your considerations?
AA: We’re fortunate to have an amazing and supportive group of investors involved in Urban Sky already, including Lerer Hippeau. For the Series B, we were most interested in bringing on long-term, patient, trusted capital partners, and we found that in Altos as the lead investor of this round. We’re not building a niche company that we intend to sell within a few years at a moderate profit. We intend to build a category-creating, long-lasting business that will become the global leader in stratospheric technology and Earth Observation data. We’re lucky to have found investors that believe in that vision, and those that intend to stick with us over the long-term to create outsized and meaningful value for shareholders and the world at large.
