A Review of the Seraphim Space Investment Trust

Arthur C. Clarke once said “two possibilities exist: either we are alone in the Universe or we are not. Both are equally terrifying.” Space has always had an allure that’s attracted investment dollars from billionaires and retail investors alike. For the latter, so far it’s been slim pickings. Old school satellite operator stocks aren’t very appealing and the space ETFs on offer are just dreadful. Yes, even ARK’s space ETF.

While some appealing companies are unfortunately deciding to go public using special purpose acquisition companies (SPACs), we’re left holding no space stocks in our tech portfolio. (Once the Planet deal closes, we’ll have one, but that’s about it.) That’s why we’re always grateful when our lovely readers point out new vehicles for investing in space – like Seraphim Space Investment Trust (SSIT.L).

About Seraphim Space Investment Trust

We haven’t had a lot of good things to say about publicly traded venture capital firms, though we have found some interesting funds that dabble in private companies. Both Scottish Mortgage Investment Trust and Baillie Gifford US Growth Trust come to mind as viable ways to play both public and private tech companies. Now, there’s another publicly traded firm that allows one to invest in public and private companies that are pure plays on the space theme. Seraphim Space Investment Trust became publicly traded just days ago, raising $250 million in the process. Today, we’re going to talk about what companies they plan to initially hold based on information contained within their registration document dated June 2021.

Credit: Seraphim Space Investment Trust

All numbers will be provided in USD since the majority of our readers use this currency. There are many moving parts that change quickly so this analysis is meant to be a snapshot of what the company will look like following their July IPO.

19 Space Companies

Seraphim isn’t starting from nothing, but rather they plan to acquire a portfolio of 19 companies with the proceeds from the IPO. That portfolio is one they already held prior to the IPO, and they are more or less transferring assets from one legal entity (Seraphim Space Fund) into another legal entity (Seraphim Space Investment Trust), the latter being the new company that just became publicly traded. The collection of 19 companies can be divided into two groups:

  • 15 companies with a combined value of $36 million as of May 2021
  • 4 companies with a combined value of $69 million as of May 2021

Let’s start by looking at the 15 companies first.

The First Fifteen

Here’s a table showing the company name, the percentage of the company Seraphim owns, and the implied valuation of the company based on that percentage.

Company NameValue
(USD millions)
% OwnedImplied valuation
(USD millions)
Altitude Angel5.1118.6%27.5
AST SpaceMobile2.900.4%724.5
Isotropic Systems1.932.8%69.0
Bamboo Systems1.7933.4%5.4
Satellite Vu0.8312.5%6.6
Xona Space Systems0.695.0%13.8
Nu Quantum0.411.0%41.4
Nightingale Intelligent SystemsN/A5.9%N/A

The first company on that list we recently covered in a piece titled Tracking Space Debris with LeoLabs which talked about their latest round – a $65 million Series B raised last month. The other company we’re familiar with, and the highest valued of the lot is AST SpaceMobile, a firm we’re quite skeptical about given we’ve yet to see a proof of concept that sufficiently convinces us that any mobile phone can become a satellite phone.

That leaves us with 13 companies we haven’t covered yet, not all of which we might classify as “space” companies. Seraphim expands their definition of space in much the same way ARK considers Trimble a space stock. In their definition, Seraphim also includes autonomous vehicles stating:

The coming automation revolution – be it robots, drones, autonomous cars or flying taxis – all rely on precise navigation and fail-safe connectivity.

Credit: Seraphim

Two of Seraphim’s holdings fall under the category of drones.

(USD millions)
Altitude Angel4.9A cloud-based automated air traffic control platform for drones and flying taxis
Nightingale Intelligent Systems8.6Security drone that deploys autonomously when activated by the security system

That leaves us with 11 space companies remaining.

(USD millions)
PlanetWatchers7.3Uses synthetic aperture radar imagery – plus AI – from satellites for crop monitoring and insurance and automated insurance claims assessments.
Edgybees16.4AI-powered augmented reality platform that uses satellite data for real-time information overlays for any video stream
Isotropic Systems60Creating a mesh network of satellite connectivity by developing an antenna capable of connecting to any satellite in any constellation in any orbit
Bamboo Systems11.5Low power miniaturised servers based on ARM microprocessors
QuadSAT3.3Testing and calibration of satellite antennas using a drone platform.
Satellite Vu5Smart energy meter from the first infrared imaging smallsat constellation capable of monitoring the thermal footprint of any building every few hours
TransRoboticsUnknownSoftware-defined digital radar built using standard wifi chips for enabling machine vision for autonomous systems.
Xona Space Systems1.1The world’s first smallsat GPS constellation delivering centimetre level accuracy for autonomous navigation
Ch.ai1.9AI-enabled predictive analytics platform to predict commodity prices using a variety of data sources including satellite imagery
Opteran2.72a chipset for computer vision enabling simultaneous localization and mapping based on the biomimicry of bee brains.
Nu Quantum5.5Single-photon quantum photonics systems, integral to building quantum secure communications infrastructure

That’s a nice collection of companies addressing a wide variety of space-related use cases. Now, let’s move on to look at the other four firms Seraphim plans to acquire from themselves.

The Last Four

The reason Seraphim has distinguished these four names from the rest is that they’re “currently subject to corporate activity which may have a material impact on the value of those investments.” Two of the companies – Spire Global and Arqit Limited – are SPAC mergers that have yet to go through. The below table shows the “fair value” of these investments compared to the “estimated transaction fair value.”

Credit: Seraphim Space Investment Trust

We recently sold our holding in Spire for two reasons – the SPAC merger hasn’t been finalized, and we believe that Planet is the leader in this space. There is certainly room for more than one winner, so holding Spire might make sense for Seraphim. As for Arqit, we published a follow up piece on them titled Arqit Quantum Stock: An Overvalued Encryption Play. Long story short, they need to demonstrate product-market fit with meaningful revenues.

Then there’s D-Orbit which we looked at in our past piece on 6 Technologies for Space Debris Removal. Finally, there’s ICEYE which we looked at in our piece on Space Radar Satellites Tracking Earth From Space.

To Buy or Not to Buy

Our first concern lies in the company’s strategy which talks about how long a horizon they’re looking at holding their assets for. This particular concern surrounds the SPAC transactions they’ve participated in. We believe that once a SPAC merger is complete, the people who orchestrated the merger do well, the company does well, but retail investors fare poorly. Therefore, a fund that realizes a SPAC exit event for one of their startups – one that likely took place at decent valuations – should not continue holding those positions, but rather use the opportunity to realize a return for its investors. That is, unless the fund believes that the company has immense potential beyond the current valuation, and plans to hold it long enough to realize that, which is what Seraphim believes.

If the space investment thesis is just getting started, we’d rather Seraphim invest the lion’s share of their capital in companies that have yet to exit so they might realize the maximum amount of upside. Being one of the leading venture capital firms in NewSpace, Seraphim has plenty of deal flow to fill their portfolio with new and exciting space startups.

There’s nothing wrong with Seraphim from the perspective of a retail investor who has the time to monitor all the moving parts within the company. Alternatively, you can just entrust the management team will act in your best interest and leave it at that. It’s certainly a much better way to get some space exposure than any of the crummy space ETFs out there. We’d rather wait for some of this dust to settle and see how Seraphim goes about allocating the remaining 58% of their cash (about $145 million) before going long here.


Given the serious lack of diversified space funds or ETFs, Seraphim Space Investment Trust is a first of its kind that shows some real promise for retail investors. With the majority of cash yet to be allocated, we’ll check back once the dust has settled following the IPO and the planned SPACs have gone through as expected.

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10 thoughts on “A Review of the Seraphim Space Investment Trust
  1. Seraphim’s investment trust gets firepower for bigger space deals. Space startup investor Seraphim Capital’s investment trust started trading on the London Stock Exchange July 14, raising about $250 million for larger international acquisitions.

    Looking at the price movement: the price started at 102p (14 July) and now is 105.46p. So the price hasn’t changed much.

    1. The value of stocks like this one are based on the value of their underlying portfolios. For Seraphim, this sits at $250 million that they raised. Once they begin acquiring assets with that money, the value changes to the value of the assets and fluctuates accordingly. Shares will never trade to far above or below net asset value (NAV) because arbitrage takes care of that.

  2. I don’t like the fact their porfolio has one large position (LeoLabs) and there is a number of completely insignificant positions.

    1. We need to wait and see what actually ends up in their final portfolio which is yet to be confirmed.

  3. You say “Shares will never trade too far above or below net asset value (NAV) because arbitrage takes care of that.”, but thats not the case with investment trusts, which often trade at a significant discount to the underlying NAV. Especially in the private equity space, as NAV is not based on actual share prices, but it somewhere between a highly reliable accurate estimation or a wild guess, and you cant tell which! ;-).

    I bought into this at IPO, but what I am expecting to happen over the longer term is for NAV to increase, but share price to increase at a somewhat slower rate until this is trading at some discount to the NAV like the other PE trusts out there. See Pantheon, Harbourvest, ICT as examples. Of course the one glaring exception to this is the tech trust HgCapital which actually trades close to NAV or even at a premium – so Seraphim might go that way, and I wouldn’t mind too much if it did, but given the uncertainties in the valuations of the unlisted businesses, then I wouldn’t be surprised to see a 15% discount to NAV by this time next year.

    1. You are absolutely right Pete and your point is duly noted. We did touch on this in a prior piece on publicly traded VCs (https://nanalyze.com/2020/03/investing-publicly-traded-venture-capital-firms/) in which we tried to explain the reason for the NAV discount. You are correct that most these vehicles trade at a discount to NAV as the norm. Thank you for pointing this out as many readers may not understand that this vehicle moves differently than a stock because it relates to the value of the assets it contains which – as you pointed out – don’t often have a quoted price (the ability to mark to market as the finance types would say) and this uncertainty is a risk that results in a discount.

  4. Centricus Acquisition (ticker: CENH), a Nasdaq-listed special purpose acquisition company, or SPAC, led by former Deutsche Bank deal maker Garth Ritchie, which is set to merge with Arqit at the end of August, in a deal that would value the British company at $1.4 billion.

  5. Bit later than. I expect, but the Arquit merger completed earlier this month, and the acquisition into SSIt completed today. So thats 2 out of the final 4 investments which are sorted now. Am really happy with how this is going 🙂

    1. “Sorted” is when an investment is sold for a great deal more than it was purchased. Until then, it’s paper gains.

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