CAPE CANAVERAL, Fla. — A startup company has raised $18 million to provide broadband internet access from space using small satellites in geostationary orbit.

San Francisco-based Astranis announced the Series A funding round March 1 led by Silicon Valley venture capital firm Andreessen Horowitz. Others participating in the funding round include Y Combinator, Fifty Years, Refactor Capital and Indicator Fund.

The funding will go towards the development of the first in what the company plans to be dozens of smallsats that can each provide up to 10 gigabits per second of capacity. Those satellites, the company’s founders and investors argue, can provide internet access to underserved areas more cost-effectively than traditional large geostationary satellites or constellations of low Earth orbit smallsats.

“We’ve taken a lot of these new approaches around small satellites and applied them to solve this problem in telecommunications,” said John Gedmark, chief executive of Astranis and the former executive director of the Commercial Spaceflight Federation, in an interview. Gedmark is one of the co-founders of Astranis, along with Ryan McLinko, the company’s chief technology officer.

Each of the company’s smallsats will weigh 300 kilograms and generate about two kilowatts of power. A key enabling technology, he said, is a digital payload developed by the company that provides design flexibility and enables lower costs.

The company recently tested that payload on an experimental cubesat, DemoSat-2, launched on an Indian Polar Satellite Launch Vehicle in January. “Everything on the satellite worked perfectly,” he said, including a test of its ability to perform “full broadband comms” during a ground station pass last month.

Astranis believes it can combine the low costs and economies of scale provided by small satellites with the ability, by operating from GEO, to start providing service with just a single satellite. “We can do everything we need to do with small satellites, put them up one at a time, build them on an assembly line and get to a dramatically lower cost,” Gedmark said.

The Series A round provides Astranis with the funding to develop and build the first satellite, allowing it to provide services far sooner than if it developed a LEO constellation. “In GEO, you can put up a single satellite to start,” he said, versus an “all-or-nothing” approach for LEO constellations where hundreds of satellites may need to be launched before beginning service.

“You don’t need billions of dollars. You don’t need years and years to build and launch them all,” he said. “Each extra satellite that we put up is adding more capacity, but we can start with just one.”

The company plans to partner with existing, but undisclosed, GEO satellite operators who would provide orbital slots. Gedmark said Astranis is in talks with a number of them. Those operators would handle the sales and marketing of the services provided by the Astranis satellites, which can use standard Ka- or Ku-band ground terminals.

Astranis currently has 20 employees, and looks to grow to about 30 in the next year and 40 to 50 by the time the company’s first operational satellite is in orbit, Gedmark said. The company is building out a 15,000-square-foot facility in San Francisco that will serve as the manufacturing facility for the satellites.

Gedmark said he was not worried about competition from large GEO satellites or LEO constellations, or even terrestrial services, given what he perceived as the vast size of the market. “If a market is growing fast enough, or is big enough, you just don’t spend any time worrying about competitors because it’s really more of a problem of just being able to scale fast enough to meet the demand,” he said. “There’s no question that the world’s hunger for bandwidth is one of those cases.”

That’s a view shared by Martin Casado, general partner at Andreessen Horowitz and a member of the board of directors of Astranis. “Broadband alone is a $120 billion market,” he said in an interview. “I think there’s a very large business to build there.”

Astranis is the first space business that Andreessen Horowitz has invested in, and Casado said he met with dozens of space startups before making this investment. “We wanted to make sure that we made an investment in an area that we understood,” he said, citing his background in networking.

“We loved the Astranis approach, which felt like a nice compromise in the design space” between large GEO satellites and LEO constellations, he said. “You can get a flexible satellite that’s much smaller and provide coverage in the near-term.”

Casado said that, in addition to the funding his firm is providing, he will be offering advice on growing a business based on his experience creating a networking startup that was later acquired by VMware. Dan Birkenstock, one of the co-founders of Skybox Imaging, will also serve as a board observer to provide advice to Astranis.

He added that he hopes to learn more about the space industry through this investment. “I’m excited to learn about space, and hopefully that will lead to further space investments.”