Seraphim Space, the UK-based house tech funding group is formally launching its second VC fund following its first close with restricted companions together with Eutelsat, TechCrunch realized solely. The early stage fund will construct a world portfolio of 30 startups that might be backed on the seed and Sequence A phases.
CEO and supervisor Mark Boggett declined to reveal the share reached and fund’s focused dimension, however stated it ought to be bigger than Seraphim House’s 2017 £70 million VC fund (round $90 million on the time.)
Like its predecessor, Seraphim’s second VC fund, SSV II, is backed by main gamers from the aerospace sector seeking to sustain with innovation.
This time round, Seraphim may also be working in a busier and extra aggressive market.
Buyers have grow to be more and more conscious of house startups and the broader market, which may very well be price $1.8 trillion by 2035, up from $630 billion in 2023, based on a latest report by the World Financial Discussion board and McKinsey. The variety of funds keen to put money into house tech has elevated in comparison with 2017, together with each generalists and specialists akin to Space Capital, SpaceFund, Starbridge Venture Capital and Starburst Aerospace.
Seraphim House hopes to face out with its monitor report.Its first fund returned thrice the unique funding, which helped dispel the cliché that house funding is “super high risk and super long term,” Boggett stated.
Returns from its final fund had been partly fueled by 5 exits — the commerce sale of chip firm UltraSoC to Siemens and 4 IPOs: Arqit, AST SpaceMobile, Nightingale and Spire Global.
Nevertheless, at the moment’s public market is a unique world in comparison with 2021, particularly for tech listings. This impacts each Seraphim House’s portfolio firms that went public and the funding group itself.
The agency’s development fund Seraphim House Funding Belief (SSIT) listed on the London Inventory Trade in July 2021 with £250 million in gross proceeds (some $300 million on the time.) After an all-time low in July 2023, its market cap is now £130 million, or $162 million, even though SSTI’s largest holding, ICEYE, turned EBITDA profitable final 12 months.
These market circumstances compelled the cash-strapped SSTI to focus on follow-on investments fairly than new offers, and advised that getting funding by way of the LSE for early-stage, non-profitable bets can be even more durable.
“With VC funds, we’re able to make mistakes and have failures and high levels of risk over a longer period of time than the public market is comfortable with,” Boggett informed TechCrunch. And whereas it didn’t assist that SSIT was buying and selling at a markdown, its existence has been useful in different methods.
Via an method often known as a warehouse association, SSIT funded the 9 investments that SSV II already made earlier than its first shut. This helped present potential restricted companions that its funding thesis goes past what house is normally conflated with akin to. launching rockets and satellites.
Extensive house
The market development anticipated by the World Financial Discussion board displays that house tech has purposes in different industries.
“All of the big trends that are underway are really being enhanced by space,” Boggett stated, likening it to AI within the sense that “it’s really an enhancing capability, a facilitating capability for every other sector.”
The applying of AI to house information is one among important themes SSV II will put money into. The truth is, it already has carried out so by backing insurtech startup Delos and carbon credit score verification platform Renoster. Each firms use giant troves of knowledge and modeling to handle points associated to local weather change.
Seraphim House’s enthusiasm for firms like Delos is two-fold: the tech may have an actual affect past monitoring they usually have the potential for top valuations (and returns).
“They’re addressing some of the biggest problems that we are faced with.”
The fund’s third space of focus might be in-orbit computing. It sounds a bit extra summary, but additionally has the potential to have an effect on sectors akin to agriculture and infrastructure. As an example, this class consists of Aethero, an organization that develops edge computer systems that may finally help autonomous decision-making on orbit.
SSV II can also be concentrating on space-enabled communications, with one portfolio firm to date: Hubble Network, which needs to attach a billion gadgets through a space-based Bluetooth network. Its CEO, Alex Haro, is aware of a factor or two about locators: He beforehand co-founded Life360, which acquired Tile in 2021.
SSV II’s fourth theme, microgravity for science, reminded us of an organization outdoors of its portfolio: Varda House Industries, which is making orbital drug manufacturing a actuality, and raised a $90 million Series B round a number of weeks after its first capsule returned from orbit. Biopharma apart, different purposes embrace analysis round new supplies, Boggett stated.
Protection isn’t highlighted as an funding theme, regardless of its latest tailwinds amongst funds, however Boggett acknowledged its ubiquity in house tech.
“The vast majority of space companies are dual use companies,” he stated. However, he shortly added, “the bigger market opportunity is in the commercial market as they move into the broader underlying sectors.”
This story has been up to date to appropriate that Airbus didn’t take part within the first shut; Eutelsat did.
