Everything you need to know about the Seraphim Space IPO

Seraphim Space Investment Trust will offer investors a chance to gain exposure to a portfolio of companies working in the nascent but fast-growing space industry. We explain everything you need to know about the trust and its IPO.

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When is the Seraphim Space IPO?

Seraphim Space Investment Trust filed for an IPO in June and outlined its plans to go public on the main market of the London Stock Exchange. The IPO will be completed on Wednesday July 14, which will mark its first day of trading.

You can keep up to date with other upcoming listings on our IPO page.

Seraphim Space share price: how much is Seraphim Space worth?

Seraphim Space is planning to raise up to £180 million through the IPO by selling up to 180 million shares at 100 pence each.

These funds will allow the investment trust to buy a portfolio of 15 investments from the Seraphim Space Fund, which was launched in 2016 as the first ‘new space technology venture fund’ and has since built up a portfolio of over 50 investments, making it the number one space tech investor in the world.

The portfolio of 15 assets that Space Seraphim Investment Trust had a gross value of around £30 million at the end of May.

Seraphim Space Fund will be left with investments in four companies after selling the portfolio to the investment trust. These are stakes in encryption firm ArQit, earth imaging firm Iceye, space logistics outfit D-Orbit and satellite company Spire Global. The investment trust plans to purchase these investments too, but only after some ongoing corporate activity is completed.

‘Pending the completion of the relevant corporate activity or on confirmation that the corporate activity is no longer expected to conclude in the near term, the company will acquire all or a proportion of the retained assets from the Seraphim Space Fund in one or more transactions on or before 31 December 2021,’ Seraphim Space Investment Trust explained.

Seraphim Space said it expects to spend £70 million on acquiring the four investments which, combined with the portfolio of 15 investments, would bring the total value to around £100 million.

What is Seraphim Space Investment Trust?

Seraphim Space Investment Trust is, as its name suggests, an investment trust that aims to acquire interests in space-related companies. It defines this as ‘businesses which rely on space-based connectivity or precision, navigation and timing signals or whose technology or services are already addressing, originally derived from, or of potential benefit to the space sector.’

The initial portfolio of 15 investments that it will buy from Seraphim Space Trust after the IPO completes can be seen in the table below. If it goes on to buy the additional four investments from Seraphim Space Fund then it will also add Spire, Arqit, D-Orbit and Iceye to its portfolio, taking the total number of investments up to 19. It has said it intends to deploy any funds left over from the IPO after the initial portfolio is purchased within six to 12 months and ultimately wants anywhere between 20 to 50 holdings.

All but one of the 15 initial companies Seraphim Space will have a stake in are still private companies, so there is room for more to go public in the future as the environment for space companies evolves over time. AST Spacemobile went public on the Nasdaq in April. Three other companies in the portfolio are already in talks about going public by merging with a Special Purpose Acquisition Vehicle (SPAC).

It plans to continue investing in unquoted businesses going forward, providing investors a way to gain exposure to private space companies.

Company name

Stake held

% of total portfolio

LeoLabs

5.4%

4.5%

Altitude Angel

2.1%

18.6%

Planetwatchers

1.7%

30.5%

AST SpaceMobile

1.2%

0.4%

Edgybees

0.8%

5.0%

Isotropic Systems

0.8%

2.8%

Bamboo Systems

0.7%

33.4%

QuadSAT

0.6%

14.1%

Satellite Vu

0.4%

12.5%

TransRobotics

0.3%

21.6%

Xona Space Systems

0.3%

5.0%

Ch.ai

0.3%

8.4%

Opteran

0.1%

3.6%

NuQuantum

0.1%

1.0%

Nightingale Intelligent Systems

>0.1%

>0.1%

How does Seraphim Space make money?

Seraphim Space Investment Trust is aiming to deliver capital growth over the long-term. The primary driver that will decide the company’s performance will be how the value of its investments moves as it plans to invest in early-stage companies operating in a nascent industry in the hopes that they will explode in value as time goes on and the space industry properly takes off.

Still, Seraphim Space Fund is currently delivering an internal rate of return of 31%, which gives an idea of what the initial portfolio of assets can deliver once taken over by Seraphim Space Investment Trust. The company, however, has said it is aiming to deliver a minimum internal rate of return of 20% over the long-term. This is likely to vary year-to-year as some of its investments take-off and others fail.

It would also benefit from any dividends or other distributions that are made by the companies it is invested in, but this is highly unlikely over the short or even the medium term as most of them will still be burning through cash and years away from becoming profitable.

What is the strategy of Seraphim Space?

Seraphim Space Investment Trust says the space industry is ‘at a nexus of a number of long-term megatrends’ spanning autonomous transport and smart cities to 3D printing and artificial intelligence, all of which will rely on the likes of satellites and a new era of ‘space data’.

The industry is also steadily becoming more of a reality thanks to lower costs. For example, the cost of launching a satellite into space has fallen by a factor of over 100x since 2010 and we have seen reusable rockets pave the way for commercial space flights to start as early as this year.

This will fuel growth over the coming years. Seraphim Space says over 100,000 satellites are expected to be launched over the next decade – an astonishing figure considering there are only around 3,700 in orbit today. And this is why Seraphim Space is launching now, because it thinks it is an opportune time to invest before the industry explodes and so it can benefit from first-mover advantage.

Although investors have the ability to invest in the likes of Virgin Galactic today and companies such as Starlink are aiming to go public over the coming years, Seraphim Space understands the majority of companies are still in private hands and wants to provide investors a way of gaining exposure through public markets.

How to trade Seraphim Space shares

You will need to wait for Seraphim Space Investment Trust to complete its IPO before you can trade it, but you can trade other top stocks and new listings with Forex.com by following these four steps:

  1. Open a Forex.com account, or log-in if you’re already a customer.
  2. Search for the stock you want to trade in our award-winning platform
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade 

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