Google spinout Aalyria valued at $1.3 billion as investors pour into space-based communications

Aalyria, which was spun out of Google in 2022, raised $100 million in a funding round led by Battery Ventures.

The financing values the startup at $1.3 billion.

The deal lands as U.S. government spending on national security satellites and other defense tech is on the rise, particularly as the Trump administration seeks to outpace China.

In 2022, Google spun out a project focused on high-speed communications networks into a startup called Aalyria. Less than four years later, Aalyria is being valued by investors at $1.3 billion in a new funding round, reflecting soaring demand for reliable, speedy telecommunications.

Aalyria’s software helps networks deliver better service across land, at sea and in space. Its $100 million in fresh funding lands as the U.S. government bolsters its spending on defense technology and national security satellites, and as the Trump administration seeks to outpace China.

SpaceX’s Starlink has been snapping up government contracts, and gaining popularity with consumers, especially in areas that aren’t well served by traditional high-speed internet. Rivals like Eutelsat, Amazon and others are investing heavily in their own services.

Google is retaining a stake in Aalyria. Battery Ventures led the new funding round, joined by firms including J2 Ventures and DYNE.

Michael Brown, a general partner at Battery, said SpaceX’s success in commercializing lower earth orbit satellites with Starlink has “stoked competitive fears of satellite vendors.” In the early days of Russia’s war on Ukraine, after SpaceX turned off Starlink over Crimea, the U.S. and European countries sought greater diversity among service providers.

“They love Starlink but want alternatives, too,” Brown said. “This is where Aalyria comes into play. When you have a diversity of satellite platforms, including in lower and mid-earth orbit, the ability to route traffic between them has been nearly impossible. But they provide a seamless networking layer.”

Aalyria has already locked in contracts or research funding from partners, including Telesat, the U.S. Air Force, NASA, the Defense Department’s Defense Innovation Unit, the European Space Agency and other government offices.

Defense stocks have a long runway amid rising global tensions

When a natural disaster takes out cell towers on the ground, Aalyria’s Spacetime software allows a satellite communications network to move to cover the effected location within seconds rather than days, according to founder and technology chief Brian Barritt.

In space, the company’s software directs satellites in a constellation to automatically reconfigure to fill gaps that occur when others are degraded for any reason.

Barritt said one challenge in the market is that companies building space-based networks have so much at stake, and may want to build network orchestration solutions from scratch. It takes time to gain their confidence, he said, but “once they realize the benefit in being able to have their network operating system federate with others, orchestrate networks of networks, and monetize unused capacity, that tips the scales in our favor.”

Aalyria also sells hardware called Tightbeam, a laser-communication system, that can be affixed to a ship, a plane or other aircraft, enabling it to transmit data over distances longer than 100 kilometers, and at rates comparable to fiber internet cable.

The technology behind Aalyria’s Spacetime software was developed within Google and used as part of the company’s Project Loon, an initiative to use high-altitude balloons to beam internet service to underserved communities. Its Tightbeam systems were also developed at Google and before that at Lawrence Livermore National Laboratory.

Alphabet wound down Project Loon in 2021, opening up an opportunity for Aalyria’s founding team to acquire and commercialize the technology. Barritt was previously a senior staff software engineer at Google, with prior experience at Cisco and NASA, while founding CEO Chris Taylor is a national security expert.

Taylor brings decades of experience selling technology to the U.S. government and ally nations for civil and military purposes. He locked in the company’s first outside funding from investors including Arthur Patterson, co-founder of venture firm Accel Partners.

Headquartered in Livermore, California, with offices in Washington D.C., Pittsburgh and London, Aalyria now has about 90 employees, and has attracted talent from Google, Amazon, Meta

 and NASA. With the fresh funding, Aalyria plans to grow headcount by at least a third over the next year, Taylor said, while also investing in product, engineering and customer support.

Battery’s Brown said he expects the funding will enable the company to “get their first constellations launched, operating in space, running Aalyria every minute of every day, and begin capturing additional commercial and government opportunities.”