UK-based space technology investment group Seraphim Space is officially launching its second VC fund following an initial close with a limited number of partners including Airbus, TechCrunch exclusively reports Ta. This early-stage fund will build a global portfolio of 30 startups backed at seed and Series A stages.
CEO and manager Mark Boggett did not disclose the success rate or target size of the fund, but it is larger than Seraphim Space's 2017 £70m VC fund (approximately $90m at the time). He said it should happen.
Like its predecessor, Seraphim's second VC fund, SSV II, is backed by leading companies in the aerospace sector that are chasing innovation.
This time, Seraphim will also operate in a busier and more competitive market.
Investors are increasing their interest in space startups and the broader market, with the market expected to be worth $1.8 trillion by 2035, up from $630 billion in 2023, according to a recent report from the World Economic Forum and McKinsey. It is said that there is a possibility that it will increase to USD. The number of funds willing to invest in space technology has increased compared to 2017, including both generalists and specialists such as Space Capital, Space Fund, Sturbridge Venture Capital, and Starburst Aerospace.
Seraphim Space hopes to stand out for its accomplishments. That first fund returned three times its original investment, Boggett said, helping to dispel the cliché that space investing is “super high risk, super long term.”
The proceeds from the last fund were partially supported by five exits: the trade sale of semiconductor company UltraSoC to Siemens and four IPOs of Arqit, AST SpaceMobile, Nightingale and Spire Global.
But today's public markets, especially high-tech public markets, are a different world in 2021. This affects both listed Seraphim Space portfolio companies and the investment group itself.
The company's growth fund, Seraphim Space Investment Trust (SSIT), listed on the London Stock Exchange in July 2021 with total revenue of 250 million pounds (approximately $300 million at the time). After hitting an all-time low in July 2023, its market capitalization now stands at around £130 million, or 1.5 billion pounds, even though SSTI's largest holding, ICEYE, turned EBITDA positive last year. 62 million dollars.
These market conditions may force cash-strapped SSTIs to focus on follow-on investments rather than new trades, making it more difficult to obtain funding through the LSE for early stage unprofitable bets. It was suggested.
“VC funds are subject to mistakes, failures, and higher levels of risk for longer periods of time than the public markets allow,” Boget told TechCrunch. It didn't help that SSIT was trading at a discount, but its existence helped in other ways.
SSIT funded nine investments that SSV II had already made before the initial closing, through an approach known as warehousing agreements. This helped demonstrate to prospective limited partners that the investment theme goes beyond areas that are usually confused. Launch of rockets and artificial satellites.
wide space
The market growth predicted by the World Economic Forum reflects the applicability of space technology to other industries.
“All of the big trends that are going on right now are actually being powered by space,” Boggett said, in the sense that “space is actually an ability that enhances capabilities and drives every other field.” He compared artificial intelligence to AI.
The application of AI to space data is one of the key themes in which SSV II invests. In fact, the company is already doing just that by backing insurtech startup Delos and carbon credit verification platform Renoster. Both companies use large amounts of data and modeling to address issues related to climate change.
Seraphim Space's enthusiasm for companies like Delos is twofold. One is that this technology has the potential to have a real impact beyond monitoring, and it also has the potential for high valuations (and profits).
“They're tackling some of the biggest problems we face.”
The fund's third focus area is orbital computing. Although it sounds a bit abstract, it could also impact areas such as agriculture and infrastructure. For example, this category includes his Aethero, a company developing edge computers that will eventually support autonomous decision-making in orbit.
SSV II also targets space-enabled communications, with one company in the portfolio so far, Hubble Networks, hoping to connect 1 billion devices through a space-based Bluetooth network. The company's CEO, Alex Haro, knows a thing or two about locators. He previously co-founded Life360, and in 2021 he acquired Tile.
The fourth theme of SSV II, Microgravity for Science, reminded me of companies outside the portfolio. Varda Space Industries is making in-orbit drug manufacturing a reality, and he raised a $90 million Series B round just weeks after the first capsule returned from orbit. . Aside from biopharmaceuticals, other applications include research into new materials, Boggett said.
Although defense has not been highlighted as an investment theme despite recent tailwinds among funds, Boget acknowledged its prevalence in space technology.
“The vast majority of space companies are dual-use companies,” he says. But he quickly added, “As the commercial market expands into broader fundamental areas, greater market opportunities will emerge.”