SpaceTech Sector Newsletter

RNS Number : 0115M

Seraphim Space Investment Trust PLC

09 January 2023

 

SERAPHIM SPACE INVESTMENT TRUST PLC

SpaceTech Sector Newsletter

Seraphim Space Investment Trust plc (LSE: SSIT), the world's first listed SpaceTech investment company, intends to issue frequent newsletters providing timely updates, based on publicly available information, on the Company's investments, its Manager (Seraphim Space Manager LLP (the "Manager" or "Seraphim Space") and the wider SpaceTech market.  This is the inaugural newsletter, which covers the period from 1 October 2022 to 6 January 2023.  The Company will continue to publish reports for the quarters ending 31 March and 30 September each year, in addition to its interim and annual results.

SpaceTech Sector Update

Seraphim Space Q3 Index

Since 2018 Seraphim Space has published quarterly reports illuminating the trends for global private investment in the SpaceTech domain. The Q3 report to 30 September 2022 showed cumulative investment through 2022 remaining at the highest levels recorded and appears to be tracking 2021. Despite the economic slowdown, investment flows were $12.2bn in the 12 month period to 30 September.  Deal volumes in the 12 month period were up by 53%, with Asia, Europe and North America exceeding previous 12 month periods, early stage deals buoyant and later stage volumes flat to marginally falling. In Q3, the top 10 deals accounted for 52% of the total investment in the sector, a lower capital concentration than has been typically seen in recent quarters. Unusually, only one transaction raised in excess of $100m during the quarter, highlighting the challenge of raising growth funding rounds in the current economic climate [ link ]. These trends are corroborated in Pitchbook dataset [ link ], which also releases private space investment data. Seraphim Space's predictions for the year ahead can be seen here [ link ]. 

Record $17bn budget allocated to sector by member states of the European Space Agency

On 23 November 2022, the European Space Agency (ESA) 22 member states provided ESA with €16.9bn  ($17.5bn) for the next three years, a 16.6% increase over 2019. The UK accounted for £1.84bn. Climate and sustainability remain ESA's highest priorities. As a space agency, ESA is a procurement organisation which means the majority of this funding will flow into commercial companies. [ link ] 

NASA launched the first of its Artemis missions

An exciting milestone in space history was NASA successfully launching Artemis 1 in November 2022. The Artemis program, with a NASA budget of $93bn over the next three years, intends to re-establish a human presence on the Moon for the first time since the Apollo 17 mission in 1972 with the plan to use this as a landing post subsequently for Mars. Substantial basic infrastructure is needed to support the Artemis near term goals including communications, navigation, transportation and radio frequency (RF) spectrum management [ link ]. NASA missions contributed $71.2bn to the US economy in 2021 [ link ].

SSIT Portfolio Update

SSIT portfolio off to a blast in 2023

On 3 January 2023 SpaceX successfully concluded the first orbital launch of the year. It comes after a record launch market in 2022 with 179 orbital launches compared to 136 in 2021. This latest SpaceX launch included three SSIT portfolio companies: six satellites for Spire, which operates a constellation for collecting weather and tracking data, three synthetic aperture radar (SAR) imaging satellites for ICEYE used for climate and defence applications; and two ION space taxis operated by D-Orbit that will later deploy their own cargo of satellites.

D-Orbit extends space taxi leadership

D-Orbit,  the market leader in space logistics and orbital transportation services, launched its seventh and eighth ION space taxis simultaneously on 3 January 2023, with a cargo of 13 customer satellites. These space taxi customers include satellites being deployed for mitigating space debris, earth observation, the internet of things, ship tracking, cryptography and cutting-edge new sensors.  Once the customers satellites are deployed from the ION vehicle D-Orbit, then re-uses this growing fleet of vehicles for advanced services, including in-orbit data storage and computing, extended hosted payload capabilities and enhanced orbital manoeuvres.

AWS works with D-Orbit to demonstrate datacentre capability in orbit

D-Orbit was part of Amazon Web Services' (AWS) successful operation of a software suite on a satellite in orbit. Amazon's cloud computing division successfully ran a suite of AWS compute and machine learning software on an orbiting satellite in a first-of-its-kind space experiment. The landmark breakthrough was conducted in low Earth orbit (LEO) using a D-Orbit ION spacecraft as the test platform . [ link ]

BT backs Altitude Angel in world's largest drone superhighway

A consortium led by BT Group and Altitude Angel is operationalising the largest and longest network of autonomous drone superhighways in the world, backed by the UK government's Future Flight programme. Altitude Angel developed the foundation technology upon which the highway is being built, creating a 165-mile 'Skyway' drone corridor spanning airspace above Reading, Oxford, Milton Keynes, Cambridge, Coventry and Rugby. Under the deal, BT Group will provide connectivity and network infrastructure to deploy and maintain Altitude Angel's automated drone air traffic control software. The financial backing will allow Altitude Angel to accelerate its plans for the Skyway corridor beyond the planned 165-miles, with the aim of having thousands of miles of Skyway infrastructure connecting towns and cities as well as transport and package delivery hubs across the country, helping the UK to unlock the multi-billion drone economy. [ link ]

Quantum security company Arqit steps up the gears announcing three major contracts with AWS, Dell and Fortinet.

Arqit reported full year results , including news that it has circumnavigated the need for satellite infrastructure within their tech stack. It reported $20m of revenue and other operating income and announced three commercial partnerships: AWS has integrated Arqit into its S3 Cloud, Dell has integrated Arqit into its product list and Fortinet has integrated Arqit into its firewalls. The World needs to upgrade its encryption quickly and these hyperscale vendors are expected to help Arqit access the global market. [Links for AWS , Dell and Fortinet ]. Arqit also disclosed that the SEC is undertaking an investigation into its combination with a special-purpose acquisition company last year.

LeoLabs completes construction of its west Australia space radar site

The Australian site will operate the company's 9^th and 10^th space radars, which are expected to go online after testing is completed in the coming weeks. Both radars will be integrated into the global LeoLabs network, which has recently been bolstered by the addition of a radar site in the Azores which became operational in August 2022. The radars that form LeoLabs network are used to observe and survey satellites and debris in LEO, which is becoming more crowded as more satellites are launched into orbit. LeoLabs also announced a contract win with US Department of Commerce. [ link ]

AST SpaceMobile successfully deployed first ever cell tower in space

AST launched BlueWalker 3, its long-awaited and second operational test satellite.  In November 2022, AST subsequently marked a critical milestone in the company's development of a global network to provide 5G broadband service across the World with confirmation that it had successfully deployed BlueWalker 3's 693 square foot antenna - the largest array ever deployed in Low Earth Orbit (LEO). The company is aiming to create a worldwide service consisting of a constellation of 168 satellites, achieving global coverage once 110 are in orbit. The company also closed an oversubscribed fundraising round of $75m as it plans to deploy its operational BlueBird satellites late next year. [ link ]

Seraphim Space highlights downside protections structured into private portfolio companies

Seraphim Space published research on the Company's website which illustrates the structuring of portfolio investments. Its focus is upon the downside protections - specifically liquidation preferences and anti-dilution - which would help insulate the value of the Company's investments were there to be significant reductions in the enterprise values of portfolio companies.

Sensitivity analysis undertaken by the Manager as at 30 September 2022 looked at the implied impact on both portfolio fair value and the Company's NAV based on 10%, 25% and 50% reductions in the enterprise value of all private holdings in the Company's top 10 holdings which collectively accounted for 64% of NAV as at 30 September 2022.

The analysis indicates that even a 50% reduction in enterprise values of the private holdings in the Company's top 10 holdings would only translate into a c.19% reduction in NAV vs. its share price on 30 September 2022 trading at a 42% discount to NAV. [ link ]

Seraphim Space News

Seraphim Space Partner Candace Johnson spoke at COP27 & G20

Candace Johnson took the stage to discuss how using Space and SpaceTech together with global finance can help us meet the United Nation's Sustainable Development Goals (UN SDGs) and international climate goals. The G20 leaders met for a two-day summit under the theme 'Recover Together, Recover Stronger'. Candace's piece was featured in the G20's strategic talk series, which you can read here . It is a piece about the ubiquitous nature of Space and how the World has become connected via Space in Space for a better future for the planet and our global population, a topic key to the SSIT investment strategy.

Space Accelerator Mission #10 Investor showcase

Seraphim Space Accelerator successfully launched its programme in San Francisco, under the brand Generation Space for the US market, and ran its 10^th accelerator culminating with the Accelerator Investor Showcase event in December. Nine SpaceTech entrepreneurs successfully presented their pitch decks in front of an audience of 250+ VCs and wider ecosystem partners. These start-ups work across Kinetic Launch, Space Situational Awareness, Earth Observation, In-Orbit Testing, Space Debris Removal, Reusable Satellites, Space Blockchain. The companies are from across the globe, including Japan, Slovakia, Australia, Canada, USA, Finland. [ link ] Seraphim Space Accelerator and its affiliates will continue to run their EU and US accelerator twice per year with up to 10 SpaceTech companies on each programme.

STEM event for aspiring Space entrepreneurs

As part of World Space Week, Seraphim Space partnered with the UK Space Design Competition (UKSDC), which has been running hackathon-style competitions around the UK for more than a decade. Seraphim Space welcomed 75 students from seven schools to design a Space station for 1,000 people orbiting Mercury in the year 2058, in the hopes of securing a place at the UKSDC's National Finals with the winning UK school team then competing at the global finals at NASA. [ link ]

Podcasts and Media

Generation Space - Seraphim Space kicks off a new monthly series of SpaceTech podcasts with the first episode featuring Will Whitehorn, SSIT's Chair, and Mark Boggett, Seraphim Space CEO, setting the scene for "why Space, why now". [ link ]

Secure World Foundation - Mark Boggett discusses the ways venture capital funds can interact with portfolio companies to address sustainability and the role of the UN Sustainable Development Goals for tracking investment outcomes. [ link ]

McKinsey - Mark Boggett appeared on the McKinsey podcast to discuss strides being made in SpaceTech, its practical applications on earth and its potential impact in addressing global challenges. [ link ]

LinkedIn Live - The first in a new series of "LinkedIn live" with Seraphim Space's Vice President, Dr Maureen Haverty, discussing the SpaceTech trends for 2023. [ link ]

Note: Neither the Company's website nor the content of any website accessible from hyperlinks in it or in this newsletter (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of, this newsletter.

- Ends -

Media Enquiries

Seraphim Space Manager LLP (via SEC Newgate)
Mark Boggett, CEO / James Bruegger, CIO / Rob Desborough  

SEC Newgate (Communications advisers)                                      [e-mail]  
Emma Kane / Clotilde Gros / George Esmond                                                      [phone]

Deutsche Bank 
Mark Hankinson / Gavin Deane / Neil Coleman                                         [phone]

J.P. Morgan Cazenove
William Simmonds / Jérémie Birnbaum / Rupert Budge   [phone]

Ocorian Administration (UK) Limited    [e-mail]
Lorna Zimny                                                                        [phone]

Notes to Editors:

About Seraphim Space Investment Trust plc

Seraphim Space Investment Trust plc (the "Company" or "SSIT) is the world's first listed fund focused on SpaceTech. The Company seeks exposure predominantly to early and growth stage private financed SpaceTech businesses that have the potential to dominate globally and that are sector leaders with first mover advantages in areas such as climate, communications, mobility and cyber security.

The Company is listed on the Premium Segment of the London Stock Exchange.

Further information is available at:  https://investors.seraphim.vc

About Seraphim Space Manager LLP

Seraphim Space Manager LLP ("Seraphim Space" or the "Manager") is based in the UK and manages Seraphim Space Investment Trust plc.

Further information is available at:  www.seraphim.vc

About Seraphim Space Camp Accelerator Ltd

Seraphim Space Camp Accelerator Ltd is based in the UK which established the Seraphim Space Accelerator in 2018 and has developed it to become the world-leading VC-led accelerator with a focus on SpaceTech. The accelerator programme brings in-depth industry expertise to get Seed and Pre-Series A SpaceTech companies "investment ready" while facilitating relationships with some of the world's leading Space corporates and agencies.

Further information is available at:  www.seraphim.vc

About Generation Space LLC

Generation Space LLC is the US subsidiary of Seraphim Space Manager LLP and is responsible for its US activities. Generation Space LLC is an affiliate of Seraphim Space Camp Accelerator Ltd and is responsible for delivery of the US Generation Space Accelerator.

Further information is available at: www.generation.space

 

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