This newsletter’s featured companies both start with the letter C – Custos Media Technologies and CubeSpace - but that’s not where their similarities end. Both have attracted international interest and funding partners. Both are growing incredibly fast, working in fields at the cutting edge of science and both are pushing the boundaries of what’s possible within those fields. And both are supported by Innovus.
And there, dear reader, is where these two paths diverge. Let me tell you about why Innovus is so excited about both of these businesses.
Custos Media Technologies (which you may have read about in the most recent TIA Seed Fund newsletter) was started as a response to the burgeoning threat that digital piracy presents to the world of content creators. And, it’s a doozy… Last year alone the American movie industry was robbed of $22 billion of its revenue due to ‘infringement’ (a nice way of saying ‘theft’). 19% of movies in 2016 were leaked before their official release and, in South Africa, almost a quarter of all Internet traffic is estimated to be infringing. Digital piracy is so rampant because it’s so difficult to monitor, investigate then, thus, stop. Just consider the last thing ‘your friend’ just had to have off the internet, and how easy it was to acquire it…
Custos was created as a clever (and really unique) way to use cryptocurrencies like Bitcoin, and their online ledgers (the ‘blockchain’) to discourage the recipients of rights-protected digital material from redistributing it. This could be seen (as is being seen by many hungry investors and starving movie houses) as ‘nipping the problem in the bud’, because Custos identifies and cuts the infringement threat off before it has a chance to spread. In laymen’s terms, they hide Bitcoins within rights-protected files – music, movies or (in the near future) even books – and then employ ‘Bounty Hunters’ to find these files anywhere they shouldn’t be, claiming the bounty for themselves, which notifies Custos and their client exactly which version of which file was leaked – often In about 11 seconds. In a nutshell, if a licenced holder of a digital file (like a reviewer or editor) ever decides to ‘share’ that file, they can be identified. So, you may not be able to reacquire the leaked content, but you can definitely plug the hole...
With this information studios and publishers can react before their next blockbuster goes fully public. They can also decide to attempt to convince distributors to remove any upload links they’ve posted, cut them off from additional content, prosecute the offenders or simply move up the release date of the movie or album.
It all started in 2013, when Prof Gert-Jan van Rooyen and his co-counders had the idea and pitched it to Innovus CEO, Anita Nel, who “loved it”. Innovus then helped the newly formed Custos secure R500 000 of funding from the TIA Seed Fund, which they used to hire their first employees, travel to Hollywood to run their ideas past the most affected companies, and test their hypotheses. They then secured additional funding from new shareholders (like the international cryptocurrency experts, Digital Currency Group) and angel investors, all of whom they were exposed to thanks to Custos’ residence at Stellenbosch University’s innovation incubator, LaunchLab. But if you think all that is impressive, you’re going to be excited by what’s coming next!
Custos are growing their army of Bounty Hunters, who are currently working across 4 continents – the more eyes they have, the faster they can respond. Thanks to new solid deals they are expanding their coverage to the UK and Japan, which should be followed shortly by the USA. And they’re even looking into protecting new infant technologies like VR and AR (which are costly, and have no DRM). It won’t be long before ‘borrowing things off the internet’ is harder to do than just paying for it, like we should have done in the first place - to the benefit of all.
If Custos are moving to new heights figuratively (and, they are), CubeSpace are doing so literally. Only 4 years old, CubeSpace are one of the leading global suppliers of system components for a specific kind of satellites - Cubesats. Cubesats are small, modular satellites built from standardised pieces – in much the same way as Lego – and are the most commonly launched satellites in recent years due to their flexibility and low cost. In fact, around 200 Cubesats, weighing between 1 and 50kgs were launched in 2016.
What makes CubeSpace so important in the world of Cubesats is that they put the technology before the business. And they have done so since day dot, when Prof Herman Steyn first proposed Cubesat technology as a research topic for masters students – more specifically on the control system of these CubeSats. This is one of the most important components, as the control system is what determines a satellite’s orientation, and allows it to point itself in a specific direction (much like the eyes and steering wheel of a person driving a car). This attracted hordes of engineers from around the country, and left a massive repository of IP at the University itself.
One of those students, Mike-Alec Kearney, decided to stay on and build a satellite for the massive QB50 project, on behalf of Stellenbosch University. The aim of this project was to launch 50 Cubesats into the thermosphere in order to study it, and drew in contributing universities from all across the world. What Mike-Alec and Co. didn’t anticipate was that they would end up building control systems for 20 of the other universities’ satellites as well. This control system which was refined through successful hands-on experience, was bundled into the products that CubeSpace develops today. From here, with the help of Innovus, they built a commercial business model and started marketing themselves as CubeSpace.
Their product offering runs from devices that can measure where the sun and earth are relative to the satellite (CubeSense), to an ultra-low power satellite computer called CubeComputer. Their newest product is an incredibly sensitive camera that can find the position of a satellite based on images it takes of the stars (the most accurate sensor in the suite). In addition, they build magnetic torquers that adjust a satellite’s rotation using the Earth’s own magnetic field as well as miniature reaction wheels that can quickly turn a satellite on its axis. And, with a lot of data coming back shortly from the successful QB50 project, their products will continually improve, and their range grow, further separating them from any competition.
CubeSpace makes some of the smartest products off the planet, and they make them for some of the smartest organisations on it. They currently boast NASA JPL, SSTL, the California Polytechnical University (the originators of the Cubesat idea), Stanford University and Columbia University as clients.
In the next few months CubeSpace will be officially spinning out, to stand on their own feet. This is testament to their skills as problem-solvers and engineers and, in part, due to the business acumen of Innovus. “Most engineers would rather die than do admin,” says Mike-Alec, “Thanks to Innovus we can focus on what we love.”
Both CubeSpace and Custos come from very different background, with contrasting skill-sets; one will solve the problem of digital piracy, while the other changes how we get information from off-planet sources. But both of them are going places, and getting their fast, and we couldn’t be more excited about the journey.
INNOVUS TEGNOLOGIE OORDRAG (EDMS) BPK | Universiteit Stellenbosch
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