Poland in talks for stake in satellite company that helped Ukraine resist Russia
Chief executive of Polish-Finnish start-up Iceye says company’s valuation has risen ‘significantly’ above $1bn
Poland plans to buy a stake in a satellite company that came to prominence by tracking Russian troop movements towards Ukraine, as geopolitical tensions boost demand for military imagery.
Warsaw is in the final stages of talks to acquire equity in Iceye, said the company’s chief executive Rafał Modrzewski, without disclosing the size of the investment. The cash injection would add to $550mn raised from investors so far, he said.
Founded in 2014 by Modrzewski and Finnish partner Pekka Laurila as a provider of radar imagery of moving ice blocks to Arctic shipping companies, Iceye has become a supplier of military applications since Russia’s all-out invasion of Ukraine in 2022. Its valuation has grown “significantly higher” than $1bn, Modrzewski said.
It is among a host of companies that are seeking to capitalise on European governments expected surge in defence spending after US President Donald Trump put pressure on the region to take more responsibility for its own security.
Modrzewski told the Financial Times that privately held Iceye — which he and Laurila set up with backing from Aalto University’s Center for Entrepreneurship when they were students — wants to expand its production capacity at least fourfold to meet surging demand for its satellites.
Poland’s investment will be channelled through the nation’s development bank and follows the defence ministry’s $230mn purchase in May of as many as six Iceye satellites. They use synthetic aperture radar (SAR) technology to capture images at night and through cloud cover — a capability that conventional and larger optical satellites lack.
Poland’s development bank declined to comment on the talks.
Iceye supplied Ukraine with images of Russian troop movements ahead of Moscow’s full-scale assault in February 2022, and last year signed a memorandum of co-operation to strengthen collaboration with Kyiv.
The company has launched 54 satellites — each costing about $20mn to produce — with about half run by national defence forces, including those of the Netherlands, Finland, Brazil and Portugal.
It also has a partnership to integrate its spacecraft into BAE Systems’ cluster of satellites and a joint venture with Space42 to manufacture in the United Arab Emirates.
The Arctic market “disappeared” after western nations imposed sanctions on Russia, Modrzewski said. Iceye turned to defence because demand for its satellites would persist even after the conflict in Ukraine ended, he added.
“Would defence markets stop existing if the war in Ukraine ends? No . . . Growth in the [European defence] spending is so huge that it will take a while before that market gets overtaken by anything else.”
The company manufactures about 25 satellites annually and it wants to raise this to between 100 and 150, meaning it will need “substantial additional capital” beyond the Polish investment, Modrzewski said.
In previous funding rounds, Iceye received backing from investors including BlackRock, the world’s largest asset manager, venture capital firm OTB Ventures and Seraphim Space Investment Trust.
It has also received funding from public entities such as the European Investment Bank and Solidium Oy, a Finnish state-owned investor.
“Europe doesn’t have the time now for us to just grow organically,” Modrzewski said. “We’re going to source more financing in order to supercharge the growth of the manufacturing capability so that we can manufacture more, faster and ultimately fulfil the demand.”
Most of the company’s satellites have been launched from Vandenberg Space Force Base in California and Cape Canaveral in Florida, but also from countries including India and New Zealand. Iceye has production facilities in Finland, Spain, Greece and the US.
In May, Iceye created a joint venture with Rheinmetall to build satellites in Germany, a tie-up that Modrzewski said would give his company access to the country’s rising defence budget and connect it to weapons systems developed by Rheinmetall.
Modrzewski said he was not concerned about growing competition as Airbus and others enter the SAR satellite sector, arguing Iceye had a head start and a superior product.
“They aren’t building as good satellites, nor do they have as many,” he said. “It’s not that straightforward for a company like Airbus, which is used to a certain style of product development, to suddenly entirely switch the ways of doing business.”
Iceye’s business model prioritises speed and affordability, using cheaper components and lighter testing regimes. Modrzewski admitted this had led to failures in some units before their expected three-year lifespan, but said the company minimised the problem by having spare products in space.
“Our satellites fail more often than the big ones, yes,” he said. “But because we have a large constellation, we can immediately replace a failed satellite with another. From the customer’s perspective, that translates to 100 per cent reliability.”