Shanghai municipal government-backed Shanghai Spacecom Satellite Technology (SSST) has raised 6.7 billion yuan ($933 million) for the construction of a low-orbit satellite constellation, one of its investors said on Thursday. The series A capital raise was led by a fund set up by the National Manufacturing Transformation and Upgrading Fund (NMTUF), CAS Star said in a statement.
NMTUF's backers include China's finance ministry and state-owned companies such as China Tobacco, Chinese company registry data showed. China is racing to send satellites into orbit in a bid to catch up with Elon Musk's Starlink, a move that investors hope will also boost demand for satellites and rocket launches in the country's broader commercial space industry.
Founded in 2018, SSST aims at providing internet services based on a low-orbit satellite constellation, said CAS Star, a venture investment and incubator firm backed by a research institute under the Chinese Academy of Sciences. SSST is expected to help deploy satellites in the Shanghai government's satellite constellation plan dubbed "G60", according to a state media report published on its website in December.
Other investors in SSST's capital-raising include Shanghai authority-linked Guosheng Capital, Hengxu Capital, backed by Chinese state-owned car maker SAIC, and CAS Capital, a different investment firm associated with Chinese Academy of Sciences, CAS Star said. SSST's founding shareholder Shanghai Alliance Investment, controlled by Shanghai's state asset regulating authority, also contributed to the fundraising.
The funding will also be used to support SSST's technological development, market expansion and daily operation, the CAS Star statement said. Asiainfo Security Technologies, a Chinese network security product and service provider, is also among SSST's investors, CAS Star said.