OQ Technology, a Luxembourg-based operator of 5G Internet of Things satellites, raised €13 million ($13.02m) in a Series A funding round co-led by Saudi Aramco's entrepreneurial arm Wa'ed Ventures and Greece-based Phaistos Investment Fund.
The funds will be used to grow OQ's 5G IoT satellite constellation, further develop its proprietary technology and acquire more licences.
OQ’s technology enables applications requiring fast and real-time data processing in remote and rural areas through small satellites in low Earth orbit (LEO).
OQ is currently expanding operations and is establishing two global subsidiaries, including one in Saudi Arabia, with the aim of positioning the kingdom as a leader in satellite and space technology, Wa'ed said in a statement on Thursday.
The unit being planned in Saudi Arabia will be located in the city of Al Khobar and is set to be one of the Middle East's biggest data and network operations centre for 5G satellite services, as well as the first in the kingdom and wider Mena region, it added.
“Against a challenging economic backdrop, our decision to seek funding was rewarded with a raise that will help us achieve our immediate goals in terms of growth, expansion into Middle East, Africa, Asia, South America and Oceania, increasing our spectrum licences and patents portfolio, and further our product development,” said Omar Qaise, founder and chief executive of OQ.
Saudi Arabia is stepping up its efforts in the space race. Riyadh set up the Saudi Space Commission which, along with the Ministry of Investment and the Public Investment Fund, has been mandated to develop strategies and pour investments into space technology.
In 2020, the kingdom earmarked $2.1 billion for its space programme, as part of its Vision 2030 initiative that seeks to tap emerging technology and diversify its economy's reliance on oil.
In July, Saudi Arabia became the fourth country in the Middle East and 21st globally to sign the US-led Artemis Accords, an agreement that outlines peaceful exploration of the Moon and beyond.
Other Middle East nations that have joined the pact include the UAE, Bahrain and Israel.
5G satellites, meanwhile, are more reliable than standard 5G connections: to gain access to the internet using 5G — or any broadband connection — a user must be within range of a cell tower. With satellites, internet access is possible even in the most remote areas.
Currently, the most aggressive 5G satellite company is Starlink, which is under Elon Musk's SpaceX. It has already launched more than 3,000 satellites into orbit, with 46 deployed this week.
OQ's third satellite mission earlier this year was aboard a SpaceX Falcon 9 rideshare mission.
The global 5G satellite communication market is expected to hit almost $34bn by 2030 from more than $2.5bn in 2021 at a compound annual growth rate of 33.3 per cent, according to Prescient and Strategic Intelligence.
OQ, which also has offices in Dubai and Rwanda, has already accomplished several LEO satellite deployment missions, and more are being planned to increase its constellation.
Established in 2016, OQ’s services are being used in industries such as energy, mining, logistics, maritime, agriculture and defence.
The Saudi investment will also involve developing new products in co-ordination with the local business ecosystem and universities, which in turn will support the Vision 2030 agenda, the statement said.
“Our investment in OQ Technology is the true manifestation of our mission to position the kingdom as the centre of gravity for global tech ventures," said Fahad Alidi, managing director and chief executive of Wa’ed.
“We envision OQ to become the nucleus to building a full SpaceTech ecosystem that starts with the kingdom and outspreads to the surrounding region.”
Wa’ed Ventures, founded in 2013, is a $200m venture capital firm wholly owned by Saudi Aramco, the world's biggest oil company. It aims to promote economic diversification and new business growth in the kingdom by investing in high-growth tech start-ups across multiple sectors.