On June 6, Seraphim Space Investment Trust (SSIT) announced that the total value of its early-stage space investments rose by 1.4% to £201 million ($257 million). This growth occurred despite a significant markdown from Astroscale’s initial public offering (IPO).
Astroscale’s IPO Impacts Valuation
Japan-based Astroscale, a space debris removal venture, sold shares on the Tokyo Stock Exchange on June 5 at roughly 40% less than its previous private financing round. As a result, SSIT adjusted its valuation of Astroscale, reducing it by nearly £4 million. Despite this reduction, Astroscale’s stake constitutes only 2.6% of the trust’s total investment portfolio.
Challenges and Rebounds in the Portfolio
SSIT also marked down its interest in AST SpaceMobile by £1.2 million due to declining share prices as of March 31. However, AST SpaceMobile’s shares have since rebounded, bolstered by a commercial agreement with AT&T, rising more than 92% since the start of the year.
Oversubscribed IPO and Market Interest
Seraphim Space CEO Mark Boggett noted that while Astroscale’s IPO price was disappointing, it was heavily oversubscribed. Astroscale’s shares surged after their debut, nearing their previous implied fair value. Although the stock dipped to 1,101 yen the day after trading began, Boggett emphasized the strong market interest in space-related companies, suggesting positive prospects for other portfolio companies considering public offerings.
Portfolio Holdings and Financial Performance
Astroscale is the fourth SSIT investment to go public since the trust’s IPO in July 2021. The trust’s top holdings by share of net asset value include Iceye (20.2%), D-Orbit (14.8%), All.Space (10.7%), and HawkEye 360 (9.5%).
SSIT’s portfolio benefited from D-Orbit’s $110 million funding round in January and Xona Space Systems’ $19 million raise last month. Favorable currency exchange rates and increased valuation of Spire Global also offset the impact of Astroscale’s IPO.
Future Prospects and Financial Strategy
SSIT reported that approximately 72% of its portfolio is funded for at least 12 months, with 61% fully funded. In April, SSIT sold its stakes in nine companies to Seraphim Space Ventures II, reflecting a strategic shift to focus on more mature growth assets. The trust gained a share in Seraphim Space Ventures II worth £3.8 million.
Will Whitehorn, SSIT’s chair, expressed confidence in the portfolio’s prospects for 2024, highlighting the trust’s cash reserves of £25.7 million as of March 31 to meet anticipated funding needs.
Despite the challenges posed by Astroscale’s discounted IPO, SSIT has demonstrated resilience and strategic growth. With strong market interest in space startups and a well-funded portfolio, the trust remains optimistic about its future performance and investment potential in the space sector.