No Bars? No Problem

Market Overview
War? What War? Global equities climbed to all-time highs this week on headlines that the US and Iran might extend a ceasefire and positive earnings results from companies such as the major US banks. Tensions linger, but markets appear to be shrugging them off. The S&P closed above the 7,000 mark for the first time on Wednesday (Bloomberg), putting it up 3.6% for the week and up 2.6% YTD at Thursday’s close. The Nasdaq was up 5.5% on the week and is up 3.7% YTD at Thursday’s close. Our NPM Private Market Tracker*, which shows the average price performance of the 50 largest names in our internal Tape D® data, is up 11.75% YTD. (Bloomberg; NPM)

Feature
No Bars? No Problem: Direct-to-Device Market Heats Up
Direct-to-Device is a nascent, but fast-growing effort to use satellites rather than cell towers to connect smartphones and other mobile devices. A couple of headlines got us thinking about the Direct-to-Device (D2D) market this week:

1) Amazon to acquire Globalstar. Amazon announced that it would acquire satellite company Globalstar for $11.6 billion. This will see Amazon enter the D2D market in 2028, and Apple, which currently owns 20% of Globalstar shares alongside its significant commercial agreement with Globalstar, will transition its emergency messaging system to Amazon’s Leo satellite constellation (Bloomberg).

2) Starlink numbers. SpaceX has filed its confidential S-1 with the SEC, and this week we saw reports highlighting the dominance of Starlink in SpaceX‘s profitability and cash flow generation compared with its launch and AI businesses. Starlink generates ~60% of SpaceX‘s revenues and all of its EBITDA, and is the only one of the three businesses to generate cash (The Information).

This market is clearly a focus for some of the world’s largest companies and may transform the way we use cell phones to communicate. It’s worth a deeper look.

How do cell phones work now? When you make a call or use data on your phone, your phone transmits a radio signal to the nearest cell tower via radio frequency (RF). That tower then connects with other towers in the cell phone carrier’s core network (through fiber or RF) to route your call or data to its destination. Each tower covers a geographic “cell” and as you move, your connection automatically hands off from one tower to the next. The key limitation is obvious: If there is no tower nearby, there’s no service. Oceans, mountains, rural areas and other remote locations lack coverage, and this is the gap that D2D satellite service is designed to fill. Today’s traditional cell service operates entirely on terrestrial spectrum.

How D2D works. Instead of connecting to a ground tower, your phone’s radio signal is received directly by a satellite in Low Earth Orbit, with the satellite essentially acting as a cell tower. The signal would go from your phone to a satellite using space spectrum (described below), then to a ground station and to another phone, bypassing terrestrial spectrum entirely. Your phone’s signal has much farther to travel to a satellite versus a cell phone tower and arrives much weaker. Starlink and Amazon Leo are trying to solve this problem by putting massive numbers of satellites in very low altitudes to keep the signal path short and strong. AST SpaceMobile is building enormous satellites because a bigger antenna can receive and amplify a weaker signal.

Spectrum: Terrestrial and Space. As the name implies, terrestrial spectrum is for ground-based, cell tower-to-cell tower use. Carriers such as Verizon, AT&T or Vodafone in Europe have spent billions of dollars bidding on terrestrial spectrum at auctions held by the FCC in the US or by national telecom regulators in Europe. Terrestrial spectrum is relevant when thinking about how D2D companies like Starlink and AST will connect with your cell phone on the ground today.

Space spectrum for the purpose of D2D – called Mobile Satellite Service (MSS) spectrum – is a fundamentally different type of spectrum. The two main frequencies are L-Band (1-2 GHz) and S-band (204 GHz). The International Telecommunication Union (ITU) coordinates MSS spectrum globally to prevent satellite systems from interfering with each other, and while authorizations are still received through national regulators such as the FCC, the acquisition process is totally separate. There are very few companies that have licenses for this spectrum because it is expensive and, for years, it was a relatively slow-growth market used mainly for satellite phones. In fact, both Globalstar and Iridium went bankrupt having paid billions for the spectrum. Key legacy players in MSS are Globalstar, Echostar, Iridium, Viasat (which acquired Inmarsat in 2023) and Ligado.

D2D is the convergence of terrestrial and space spectrum. While MSS spectrum allows D2D companies to bypass terrestrial cell towers altogether, D2D providers are still partnering with Mobile Network Operators (MNOs) such as Verizon and AT&T even as they are looking to acquire their own MSS spectrum. SpaceX applied for MSS spectrum in 2024 but the FCC rejected its application citing the fact that no framework existed for new entrants to the market (Globalstar and Dish Network filed formal opposition letters) (BBC Mag, Satellite Today). Since that time, it has announced a partnership with T-Mobile on the terrestrial side and acquired MSS spectrum from Echostar. AST SpaceMobile’s has partnered with over 50 MNOs, including AT&T, Verizon and Vodafone, and has announced an agreement to lease MSS spectrum from Ligado. Globalstar’s relationship is with Apple, not an MNO, though Amazon has said it intends to work with MNOs post-acquisition (Company reports).

Why do D2D companies continue to work with MNOs while they are acquiring MSS? For one thing, the SpaceX/Echostar and AST/Ligado deals are pending FCC approval, and the Amazon/Globalstar transaction will need regulatory approval as well (the deal is expected to close in 2027). Until that time, they will need to partner with MNOs in order to transmit to mobile devices. In addition, even if they have their own MSS spectrum approved and operational, phones need specific chipsets and software to receive S-band and L-band frequencies. The vast majority of cell phones today are built around terrestrial carrier bands, so MNO partnerships are critical (this is why Apple’s relationship with Globalstar is important – Apple has engineered its devices to work with Globalstar’s MSS spectrum for emergency messaging). Related to this is distribution. MNOs have hundreds of millions of existing customer relationships, billing infrastructure and marketing reach. It may be cheaper and quicker to share revenue with an MNO, at least initially, rather than building this business from scratch.

Until the D2D players get their MSS spectrum approved, the path of a cell phone signal is a bit of a hybrid. Using Starlink and T-Mobile as an example, your phone would send a signal on a T-Mobile frequency to a satellite that is configured to receive a signal on terrestrial spectrum bands; the satellite then relays the signal to a Starlink ground station which connects back into T-Mobile’s network and routes the call to its destination.

Where could the market go? Starlink has by far the largest footprint to-date, with ~10,000 satellites in orbit and over 10 million active customers (Bloomberg). Starlink has also signed deals with airlines such as United, Southwest, British Airways, Air France and Emirates. Amazon Leo, in contrast, has roughly 200 satellites in orbit though it has a goal of eventually operating over 7,700 (Bloomberg). Amazon Leo has signed an agreement to provide service to Delta Air Lines. Because AST SpaceMobile is using huge satellites, its network buildout challenge is less about satellite count and more about manufacturing its BlueBird satellites and procuring launch capacity for them (though Amazon Leo faces a launch capacity challenge compared with Starlink owing to SpaceX’s vertical integration). AST aims to deploy up to 60 satellites and has deployed 6 to-date, with its 7th due to launch imminently on a New Glenn rocket.

One key question as D2D players build out their constellations is whether they will continue to partner with MNOs over the long-term. Starlink may be positioned to launch its own service, possibly with their own hardware, and disintermediate T-Mobile altogether (Payload).

Another key question is the size of the market. The prospect of D2D becoming a widely-adopted feature in cell phone plans is tantalizing given the number of users globally. Even a relatively small ARPU (average revenue per user) could mean big dollars for the companies that gain share in this market. At the same time, it’s far from certain that the market will materialize. Many cell phone users receive sufficient coverage for their needs today and may not be willing to pay extra for global coverage. The market could therefore be limited to users in areas with bad signals, implying a much smaller TAM. Ultimate revenue share agreements with MNOs could also dramatically change D2D economics. (Payload)

With the billions that major companies like SpaceX, Amazon and Apple have spent on D2D to-date, we expect more focus on the industry as this new market develops.

BIGGEST MOVERS AND TOPICAL NAMES

Based on our proprietary Tape D® data, the best performers of the large cap names in the private market thus far in 2026 have been:

Cerebras (+155%)
OpenEvidence (+76%)
Clickhouse (+76%)
Whoop (+71%)
Neuralink (+60%)
Reflection AI (+39%)
Eleven Labs (+38%)
Saronic (+38%)

Based on our proprietary Tape D® data using weighted averages for each sector, the top performing sectors YTD are Consumer (34%), Healthcare (+16%), Fintech (+13%), and Industrials (+11%). Whoop drives performance within the small Consumer sector, while OpenEvidence (+76%) drives Healthcare in a stark contrast to the paltry performances from traditional health and biotech names. Stripe (+27% YTD) drives Fintech, while Industrials’ performance of +11% essentially SpaceX since it dominates the sector with a $1.25 trillion valuation. AI/Machine learning is up just under 3% YTD as OpenAI‘s size and -15% YTD performance offset Cerebras (+155%) and Anthropic (+32%).

RECENT EVENTS

OpenAI has agreed to pay Cerebras more than $20 billion to use servers powered by the firm’s chips. This is double the figure previously associated with the deal. OpenAI has also agreed to provide Cerebras with ~$1 billion to fund data center development (The Information, 4/16).
xAI plans to allow startup Cursor to use some of its computing power for training (Business Insider, 4/15).
The Pentagon is in talks with US automakers over shifting personnel and production capacity to defense purposes (Well Street Journal, 4/16).
After selling its IP and other assets for $39 million last week, shoe manufacturer Allbirds announced it is turning itself into an AI Chip firm called NewBird AI (CNBC, 4/15).
Thoma Bravo announced a strategic partnership with Google that will see Gemini introduced to its portfolio companies (Pitchbook, 4/15).
A federal jury found that Live Nation illegally monopolized the live events industry and overcharged fans for tickets to music performances (Bloomberg, 4/16).

NOTABLE CAPITAL RAISES

Flock Safety, an Atlanta-based surveillance tech company is in talks to raise a new round (Axios, 4/15).
Slate Auto, which is building low-cost electric pickup trucks, raised a $650 million Series C (StrictlyVC, 4/13).
Fluidstack, a cloud startup that builds and operates high-performance data center infrastructure for AI, is reportedly in talks to raise ~$1 billion at an ~$18 billion valuation (Bloomberg, 4/15).
Popup Bagels, a bagel chain with 30 locations in 10 states, raised new funding at a $300 million valuation (Axios, 4/13).
Glydways, a developer of autonomous vehicle networks, raised a $170 million Series C at a ~$700 million valuation and is in now talks to raise $250 million at a $1 billion+ valuation (Bloomberg, 4/15).
Turion Space, a space-tech infrastructure company that builds maneuverable satellites and software to track and monitor objects in orbit, raised a $75 million Series B (Pitchbook, 4/16).
Wayve, a UK-based company developing a platform-agnostic autonomous driving system, raised a $60 million Series D extension (StrictlyVC, 4/16).
Hertha metals, a startup producing low-carbon steel, is raising a $100 million Series A (Axios, 4/15).

NOTABLE EXITS

Defense electronic and mechanical component manufacturer Arxis raised $1.13 billion in an upsized IPO (Tectonic, 4/16).
OpenAI acqui-hired Hiro, a startup that builds an AI-powered personal CFO to help users manage their finances (StrictlyVC, 4/13).
Crypto exchange Kraken confirmed that it filed confidentially to go public. It also sold $200 million of shares (1.5% of the company) to Deutsche Boerse in a secondary transaction (StrictlyVC, 4/15).
Caterpillar acquired Monarch Tractor, a maker of self-driving electric tractors (Axios, 4/15).
Irenic Acquisition, an aerospace and defense SPAC, filed for a $220 million IPO. General Catalyst Global Resilience Merger, another aerospace and defense SPAC, filed for a $350 million IPO (Axios, 4/13 and 4/14).