Data analytics company HawkEye 360 Inc. has gained a new investor and strategic partner who, notably, is also a huge-name in the government contracting world.
Leidos Holdings Inc. (NYSE: LDOS), the $12.3 billion Reston-based defense contractor, has come on board. It’s committing $5 million to HawkEye 360 as part of the second closing of its Series D funding round, the companies shared in a release. In the round's first close in November, HawkEye 360 raised $145 million; this brings the total to $150 million. Less than a year ago it also raised $55 million in a Series C round.
HawkEye 360’s executive vice president for global growth Alex Fox hopes the partnership will be a “force multiplier” for its business, he said in an interview. Perhaps the most significant aspect of the Leidos partnership is the relationships and expertise the massive contractor — which boasts 39,000 employees, 11,300 of which are in Greater Washington – will bring to the young company.
“There’s the investment part and then there’s the commercial agreement part with Leidos,” Fox said. “That’s about collaborating on how we can leverage our existing contracts and systems… and how we might jointly develop new products and bring those to market together, and what joint marketing activities we can do.”
Fox noted that with the strategic partnership, it will be “easy for [Leidos] to bring in our capability” to Leidos’ existing contracts, which span civil, defense, health and intelligence. Leidos posted $3.48 billion in revenue for the third quarter of 2021, a 7% increase over the same period a year earlier.
The $5 million in new funding will go toward ensuring HawkEye 360 can execute on the same projects it planned with the initial $145 million, Fox said, such as building more satellite clusters, which it uses to provide radio frequency data to commercial and other customers, and developing cloud infrastructure and other products.
Currently it operates three satellite clusters, and it's working to add seven more that were fully funded through its series B and C funding rounds. With the Series D round, it plans to build an additional 10 clusters, eventually bringing the company’s total to 20, or 60 individual satellites, and boosting the amount of data it can gather to sell to clients.
While relatively small in staff — in November, HawkEye 360 had about 125 employees, up from around 40 in mid-2019, with plans to add 80 more in 2022 if the company hits its targets — Fox said HawkEye 360 has doubled its revenue each year for the past three years. He declined to disclose revenue figures, but said it’s on track to double its revenue in both 2022 and 2023.
As of Nov. 8, Pitchbook valued the company at $895 million, bringing it near the highly coveted unicorn status. That estimate doesn’t include the latest $5 million investment.
Fox couldn't say whether the partnership with Leidos could lead to an eventual acquisition, nor did he discount the possibility of an initial public offering as some point. He said the company remains focused on executing on its plans.
“You’re always, kind of, looking at the different options as you grow and scale your business and that’s definitely one of the viable pathways,” Fox said about an IPO path for the 6-year-old company.
In the meantime, HawkEye 360 is expanding in other ways. The company, for example, has established an additional office near its Herndon headquarters at 196 Van Buren St. CEO John Serafini told the Washington Business Journal in November that the new site would double or triple the company’s existing square footage and house some engineering employees and a manufacturing facility. Fox said that office has now been established and the buildout and renovation are continuing.
“That’s where we’ll be setting up our satellite manufacturing capability so we can start building clusters in house,” he said.
Outside of the U.S., the company is “working on setting up an initial overseas office, and we have a couple of others we’re looking at,” Fox said. The initial office is in the United Arab Emirates, and it’s looking at possible offices in Paris and Singapore.
