After a decade of work to develop and deliver a new, high speed inflight connectivity solution SmartSky is halting operations. In a message shared on its website the company notes it “ultimately could not secure the necessary financing to continue our mission.”
SmartSky tapped into unlicensed spectrum to build its product, bypassing the onerous and expensive (and generally not really available) purchase of proprietary frequency bands. Over the past five years the company announced major milestones and more than a couple impressive customer wins. But it also faced repeated delays in actually delivering the product. Those delays cost the company what advantage it had over Gogo’s incumbent position, even as Gogo’s “5G” program also is running years behind schedule. And, ultimately, the nationwide network SmartSky delivered was too little, too late.
On the technical front, the company faced multiple production and deployment setbacks. The contract with WSS became all sorts of messy, and the subject of lawsuits. SmartSky ultimately won the legal claims, but the associated production delays were far more damaging than it could recover compensation from. Indeed, it failed to recover much of anything substantive as WSS collapsed into bankruptcy.
On the market side, SmartSky and Gogo tangled repeatedly. SmartSky’s pitched its patent portfolio as a massive point of leverage, with expectations of sole control over the faster air-to-ground connectivity world. And it was clear years ago that the company’s success would hinge in large part on whether it could fend off Gogo via those patents.
Alas, those claims take time to process in the courts. The company lost its preliminary injunction claim, allowing Gogo to continue marketing the Gogo 5G offering. Between that and SmartSky’s delays in delivering the company simply could not secure enough customers to justify keeping the network online.
Some 16 months ago, even as the lawsuits dragged on, SmartSky secured a funding boost from BlackRock, effectively in exchange for control of the company. That company retains control of the intellectual property portfolio and other assets, but reports suggest it has written off their value entirely. Whether it chooses to continue the patent suit against Gogo remains to be seen.
Shortly before its cessation of operations a SmartSky spokesperson argued that “SmartSky’s estimates of its damages through trial (April 2025) are quite significant and we are confident in those estimates. Also, those significant estimates could be tripled (trebled) were SmartSky to prove that Gogo’s infringement of SmartSky’s patents is willful.” This was counter to Gogo CEO Oakleigh Thorne’s claim in the company’s latest earnings call that the company would likely not face any significant costs, even if it were to lose the suit.
In the end, some $400 million of capital (that we know about) was invested in the program. And the company was able to prove that the technology works, which is a major accomplishment. But it also failed to deliver it in a commercially viably manner, which is what really matters at the end of the day.
The full message from the company is below.
SmartSky Networks has ceased business operations effective August 16, 2024.
SmartSky was founded with a bold vision: to revolutionize aviation communications. We successfully built and operated a leading, high-performance nationwide air-to-ground network using unlicensed spectrum, made possible by innovative patented technology. Along the way, our team dedicated great energy and expertise, earning several prestigious industry awards. While our products were groundbreaking and we were growing our market share, we ultimately could not secure the necessary financing to continue our mission.
We hope that SmartSky’s achievements have inspired others to dream big, push boundaries, and pursue transformative ideas to reshape the future.
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Shame. It must have been all the money they were paying bloggers, to write articles….
I have no idea where the $400mm+ went. But about all I got of it was a couple water bottles at trade shows, and the one test flight back in 2019. And I doubt (m)any other writers got paid.
And their vendors are just getting screwed
And the employees now all out of a job, too.
I’ll be interested to see what the legal structure of the operation becomes. The company specifically said it was halting operations, but did not mention a Ch7/Ch11 process for dissolution, which would typically define how debts get handled.