How Sunghee Lee, founder and President of CONTEC, raised $11 million and is disrupting the nascent Korean Space Tech Sector with his startup?

Dr. Sunghee Lee is the president of CONTEC, a Korean space tech startup that has constructed a private ground station in Jeju, South Korea, to provide satellite reception services.

The company focuses on two business areas, namely satellite application service and ground equipment. Launched in 2015, the space tech company aims to capitalize on the emerging ‘New Space’ era.

A spin-off from Korea Aerospace Research Institute (KARI), the startup offers Space Ground Station Services, Satellite Image Processing and Application Services, and a whole ground integration solution. The space tech company utilizes AI-based detection and change detection methods to provide satellite image analysis and application services.

CONTEC’s Ground Station (GS) service provides a web-based service, CONTEC ONE, that enables customers to schedule their satellite passes in one click. The network of ground stations can receive the data.

As long as users have a secured internet connection, they can use CONTEC’s ground stations registered from any corner on the Earth’s surface. In 2021, the company is launching its Seoul GS and plans to have 12 GSs beyond Korea, including Alaska, New Zealand, Argentina, Europe, and Africa, by 2024.

In an Exclusive Interview with AsiaTechDaily CONTEC Founder Dr. Sunghee Lee Said

Our company is named after “CONTACT,” a 1997 film starring Jodie Foster based on the novel by Carl Sagan.

Would you please tell us about your personal background and What motivated you to get started with your company?

Our company is named after “CONTACT,” a 1997 film starring Jodie Foster based on the novel by Carl Sagan. The film’s storyline is very similar to what our business does. Just as in the movie, scientists contact space to receive signals on the Earth. Our company receives signals from satellites, launches vehicles through ground systems like antennas, and carries out relevant missions.

That is why we named our company ‘CONTEC’ to match the film. Also, the company’s name represents Collaboration & Novel Technology, meaning that we will develop new technologies and run our business through mutually beneficial cooperation with our customers and partners.

What is your current main product, and can you share any previous product pivot story to the current product?

CONTEC currently offers all types of downstream services ranging from the ground station to satellite imagery pre-processing/application services. By building its ground stations in major regions worldwide, CONTEC supports remote monitoring and controls for all equipment in real-time, which is needed for the operations of satellites and launch vehicles. Once satellite imagery data are received at CONTEC’s ground station, they go through calibration/validation. Then, the finalized imagery is delivered to different industries to be utilized, including smart city management, crop yield forecasts and maritime monitoring.

How much money have you raised in total so far? When was the recent funding round?

CONTEC has completed the Series B funding round, raising 1.63B KRW in 2018 and 12B KRW in 2021.

What were the internal decision processes in determining when to begin fund-raising, and what were the logistics for this? And how many investors have you met so far, how did you meet these investors, and which channels worked best for you?

We have started raising funds in 2018 and I think I have met almost every famous investor in Korea. In the early phase of our business, we received investments from KRYPTON and Jeju Center for Creative Economy & Innovation. Then, they introduced us to other investors. In this way, we could secure more investments. We could complete the Series B funding round through recommendations from the Series A investors alone. So we did not experience any particular difficulties. I think we will be able to carry out the Series C funding round without problems.

What are the biggest challenges and obstacles that you have faced in the process of fund-raising? If you had to start over, what would you do differently?

The Series A funding round was the most challenging. Back then, it wasn’t easy to explain our business to domestic investors because it is not as developed as the foreign space industry. For the investors to understand our business models, we had to explain what space, satellites and ground stations meant.

What are your future goals?

The subsequent funding round will be held in the first half of 2022. The funds raised will be spent on expanding our global ground station network, acquiring sub-meter class & high-resolution satellites, and building free-space optical(FSO) & space situational awareness(SSA) ground stations.

How have you attracted users, and with what strategy have you grown your company from the start to now?

Before COVID-19, CONTEC used to promote its business by attending numerous exhibitions abroad. But for now, CONTEC is actively engaged in online marketing activities as it is challenging to travel overseas.

Which has been the best marketing software tool for the growth of your startup and why?

Due to the nature of its services, CONTEC’s services are offered mainly to governments and institutions, and most of them have become CONTEC’s customers through direct offline marketing. Once B2C products become available, CONTEC will carry out online marketing activities to attract customers.

What do most startups get wrong about marketing in general?

Many startups tend to overlook the importance of marketing. Mainly consisting of engineers, startups do not invest as much in marketing as in product and service development.

What are your expansion plans?

For global marketing, CONTEC established its Luxembourg office in 2019. Once CONTEC’s international ground stations are completed, its Luxembourg office will start operations and strategic technical partnerships in earnest for European customers.

How did you tackle the COVID-19 pandemic and secured your company for the future?

CONTEC has developed new marketing strategies focusing on domestic activities due to limited access to overseas exhibitions, which was its main marketing channel. CONTEC is currently focusing on developing new business models and boosting the competitiveness of its existing services by developing new technologies in partnership with domestic companies and partners. Also, to minimize inconvenience to customers, CONTEC is actively using non-face-to-face marketing methods such as virtual meetings and email to communicate with foreign customers and partners instead of face-to-face meetings.