Seraphim Space (SSIT) says Xona Space Systems has jumped to become its second biggest investment after a fund raising earlier this year added £52.2m to the valuation of the Californian company developing a constellation of low-orbit satellites.
Seraphim invested $15m (£11.3m) from the £137m it raised in a C-share issue in May as part of Xona’s $170m Series C financing round that valued the start-up at $768m.
The increase adds 22p to Seraphim’s net asset value (NAV) per share of 177.63p at 31 March. The £456m investment trust expects to “substantially” reflect this uplift in its next NAV statement for 30 September. That would take the NAV to around 199.6p.
Seraphim’s ordinary shares have responded with a 4.9%, or 9.4p, rise to 201p, a small premium to the uplifted NAV. The C-shares (SSIC) rose 2.4p, or 3%, to 80.4p.
Including Seraphim’s $15m investment, Xona’s fair value has leaped to $121.5m or £91.7m compared to £28.4m at 31 March when it was the trust’s fifth biggest holding behind D-Orbit, HawkEye 360, All.Space and ICEYE.
Seraphim said Xona’s Pulsar technology enables centimetre-level positioning accuracy by its satellites that is 50-100 times better than traditional global positioning systems (GPS). “This step-change in precision and reliability is expected to unlock a wide range of high-value applications, including autonomous vehicles, drones, robotics and advanced air mobility solutions as well as supporting next-generation industrial and logistics use cases.”
James Bruegger, chief investment officer of Seraphim Space Manager, said: “Xona is addressing a fundamental challenge: the world is becoming increasingly dependent on satellite navigation, but existing infrastructure cannot provide the accuracy, resilience and security that next-generation applications require. This financing is an important milestone as Xona builds a commercial upgrade to GPS, on which the global economy depends.”
He added: “Having backed Xona from the outset, we believe it has the potential to redefine satellite navigation globally, and we are excited to support the team as it turns that ambition into reality.”
This is Seraphim’s fourth investment using the C-share money. In August it deployed a total of $55m (£40.8m) in existing holdings Hubble Network, Pixxel and Zeno Power.
Our view:
David Batchelor, senior analyst at QuotedData, said: “SSIT continues to put the proceeds of its C-share issue to work, providing further exposure to a space technology business that has already delivered a substantial uplift in value for shareholders. This latest development also illustrates the advantages of SSIT’s position within the wider Seraphim investment ecosystem, which allows it to back promising businesses through successive funding rounds. With expectations for the space sector having risen considerably, the challenge will increasingly be to translate technological progress and fundraising success into sustainable commercial growth and, ultimately, realised investment returns.”
