Japanese satellite imagery startup iQPS untraded with glut of bids in Tokyo debut

By Kantaro Komiya

TOKYO (Reuters) – Shares of Institute for Q-shu Pioneers of Space (iQPS) were untraded with a glut of buy orders in their Tokyo growth-market debut on Wednesday after the satellite imagery startup raised 3.48 billion yen ($24 million) in an initial public offering.

Shares of iQPS were deluged with buy orders at the initial public offering (IPO) price of 390 yen.

Spun off from a Kyushu University space engineering lab in 2005, iQPS becomes the second major space venture to list in Tokyo after ispace inc had a blistering debut in April.

The startup has developed small observation satellites using a technology known as the synthetic aperture radar (SAR), which takes picture of the earth’s surface with microwaves. Unlike optical sensors, SAR can capture images during dark nights and through clouds.

In the wake of Russia’s invasion of Ukraine, SAR imagery taken by satellite companies such as U.S.-based Capella Space and Finland’s ICEYE has contributed to the monitoring of the war by the Western intelligence community.

Japan is pushing to build a homegrown space industry, especially given deepening concern about China’s growing technological and military clout. Japan has a number of space-related startups, including lunar transport startup ispace.

The market debuts of the two space ventures mark a stark contrast to the recent setbacks the state-funded Japan Aerospace Exploration Agency (JAXA) has faced in rocket development. In March, JAXA manually destroyed its new H3 launcher midair due to ignition trouble, where iQPS lost two of its satellites.

The company sold 8.92 million shares after pricing the IPO at the top of its indicated range of 380-390 yen. That doesn’t include a greenshoe option of 1.34 million shares.

More than 80% of the shares were sold to domestic investors, with just under 19%, or 1.69 million, going to overseas investors.

In June, iQPS successfully launched its third satellite on a SpaceX rocket, which has generated commercial imagery with resolution of as fine as 46 centimetres, it said in its prospectus. It will manufacture 10 SAR satellites a year from 2024, aiming to establish a “constellation” of 24 satellites around the earth to obtain real-time data by 2028.

Japan’s military build-up has also been a boon for aerospace businesses like iQPS, which said it relied on government clients such as the defence ministry for 94% of its 37 billion yen ($252 million) sales in the year to May 2023, according to the prospectus. The government has promised financial support for space startups with SAR, small-rocket and other technologies.

Running at a net loss of 1.1 billion yen in the previous financial year, iQPS has not set a target for when it will turn a profit.

($1 = 146.7100 yen)

(Reporting by Kantaro Komiya; Editing by David Dolan and Chang-Ran Kim)