Seraphim Space Investment Trust plc (LSE: SSIT), the world’s first listed SpaceTech investment company, announces its interim results for the six-month period ended 31 December 2023.

Financial Highlights

• £5.7m deployed in the period, across three new investments and three follow-on investments.
• Portfolio valuation up £10.6m to £198.0m, driven by additional investments, unrealised fair value net gains and a small unrealised FX gain.
• Main driver of underlying fair value increase was D-Orbit, reflective of a €100m transaction that reached a conditional completion post period. This has been partially offset by reductions in the fair value of other companies.
• ICEYE (20.2% of NAV as at 31 December 2023), the largest holding, became EBITDA profitable during the period.
• 82% of the portfolio by fair value has a robust cash runway, with 60% fully funded based on latest projections from the companies’ management teams and 22% funded for 12 months or more from 31 December 2023.

Portfolio Key Developments

• Based on portfolio company management projections, a number of the companies have now achieved, or are expected to achieve in 2024, profitability at EBITDA level.
• Of the eight existing portfolio companies that raised rounds, six had participation from or were led by external investors. Participation of external investors demonstrates the attractiveness of the portfolio companies to new investors.
• Three companies raised flat or up rounds, which is a testament to the strong performance of these companies.
• Three companies closed funding rounds at reduced valuations relative to their previous round. In two instances, this was due to underperformance against previous expectations. In the other instance, the round was significant and represented only a modest reduction against the previous round, which was raised at the height of the market in late 2021.
• ICEYE (20.2% of NAV as at 31 December 2023) continued growth of both its data and missions businesses with four new satellites deployed, adding to its own SAR constellation and key customer Bayant ordering an additional two SAR satellites. The company has now achieved profitability at EBITDA level.
• D-Orbit (14.4% of NAV as at 31 December 2023) closed a €100m equity round and successfully launched its 12th and 13th ION Satellite Carrier missions, making the company the clear global leader in orbital transfer vehicles.
• HawkEye 360 (9.4% of NAV as at 31 December 2023) announced the second and final close of the company’s Series D-1 funding round, bringing the total series to $68m. The company used part of the proceeds to acquire RF Solutions, a provider of secure, precise, geospatial intelligence from Maxar Intelligence.
• SatVu (4.9% of NAV as at 31 December 2023) successfully commissioned its first satellite and entered commercial operations. However, the satellite experienced an anomaly after around six months of operations which led to a failure of the satellite that will impact commercial operations until another satellite can be launched. The company is working on the matter with its suppliers and in parallel is progressing development of its second satellite.
• Tomorrow.io (1.8% of NAV as at 31 December 2023) completed the second close of its Series E funding round, bringing total proceeds to $99m. Published peer reviewed research shows that precipitation data from its two pathfinder satellites is roughly on par with the leading ground-based weather radars, offering a more cost-effective solution and enabling global coverage.
• Voyager (non-top 10 investment) entered a joint venture with Airbus to develop the Starlab space station, significantly expanding its access to the European market. Northrop Grumman’s termination of its independent space station program and its subsequent partnership with Voyager has had several benefits, bringing increased NASA funding, improving the competitive landscape and strengthening Voyager’s Starlab space station.

Will Whitehorn, Chair of Seraphim Space Investment Trust plc, commented: “With the existential challenges posed by heightened geopolitical tensions and climate change, the counter-cyclical nature of the space sector continues to result in its outperforming the wider market. This trend is reflected in SSIT’s portfolio, which continues to exhibit a healthy growth trajectory and an ongoing ability to attract fresh investment from public and private capital markets.

The portfolio overall remains well capitalised, with multiple key holdings now indicating they have sufficient cash reserves to operate through to cashflow breakeven. We are also encouraged that several of our more mature holdings are now either already, or are projected to become during 2024, EBITDA positive, including our largest holding, ICEYE.”

Mark Boggett, Chief Executive Officer, Seraphim Space Manager LLP, said: “The period has marked continued strong performance for SSIT’s portfolio as well as the wider SpaceTech ecosystem, reflecting the strong fundamentals that are driving ever-growing traction for top-performing SpaceTech companies. Record numbers of SpaceTech VC investments have been closed during recent quarters, with the last six months having seen a notable recovery in levels of growth funding rounds, an encouraging sign for prospects in 2024.

These trends are reflected in SSIT’s portfolio, which has continued the positive cadence of fundraising. Eight companies closed new funding rounds during the period, once again with the majority of these rounds being led by new investors, a healthy indicator given generalist investors are spoilt for choice in terms of investment opportunities given the wider downturn in the VC market.

Although mindful of the difficulties some companies may face in accessing additional capital, overall, we remain positive about the prospects for the portfolio in 2024 and we are satisfied that SSIT continues to have the cash reserves required to meet the anticipated funding needs of the portfolio for the year ahead and beyond. This has enabled us to deploy a modest amount of capital into a handful of new investments, including Skylo, the satellite communications direct to cellphone trailblazer, capitalising on the current favourable investor conditions.”

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In the video below, CEO Mark Boggett outlines Seraphim’s Investment Strategy