Growth capital trust Seraphim Space (LON:SSIT) has invested £22.2 million in Hubble Network. For the uninitiated, Hubble is a US start-up that is building the first satellite-powered Bluetooth network.
The company is already backed by Seraphim’s investment manager through the Seraphim Space Venture Fund II.
The SpaceTech-focused trust’s managers argue Hubble is well positioned to become a ‘category leader in the burgeoning direct-to-device satellite connectivity market’.
Hubble marks the first addition of a new company to the trust using the proceeds of May’s £137 million C share issue. To learn more about Seraphim Space, watch our Podcast interview with James Bruegger here.
What does Hubble do?
Hubble was founded in Seattle five years ago. It is building the first satellite-powered Bluetooth network. This enables standard off-the-shelf Bluetooth Low Energy chips to connect directly to space without cell towers, gateways or custom hardware.
| 1-year share price total return (%) | 5-year share price total return (%) | |
| Seraphim Space | 122.5 | 62.7 |
| Molten Ventures | 85.5 | 34.5 |
| Schiehallion Fund | 74.6 | 8.4 |
| Schroders Capital Global Innovation | 30.8 | -43.6 |
| Schroder British Opportunities | -12 | -37.3 |
| Chrysalis Investments | -37.2 | -70 |
Source: The AIC/Morningstar
James Bruegger, CIO of Seraphim Space Manager LLP, said: ‘One of the key advantages of Seraphim’s multi-stage investment strategy is our ability to identify promising companies early, support their development through our early-stage venture funds and, where appropriate, enable SSIT to invest in the subsequent growth rounds of the most exceptional performers.’
Potential category leader
Hubble has progressed rapidly, according to Bruegger. It has morphed from an early-stage investment to a growth-stage business. The company now has seven satellites in orbit and a terrestrial network of more than 100 million access points.
In addition, Hubble has ‘significant commercial traction’ across multiple verticals. ‘We have developed strong conviction in both the business and the opportunity it is addressing’, he added.
Furthermore, the managers believe Hubble is ’well positioned to become a category leader in the burgeoning direct-to-device satellite connectivity market.’
We think Seraphim Space is a fascinating proposition for growth-focused investors. The catch is you will have to pay a near-6% premium to NAV to access its compelling strategy.
The £446 million cap trust is opening access to a multi-trillion-dollar opportunity in the global SpaceTech sector. And the Hubble investment demonstrates the manager’s ability to take promising venture investments onto the next stage using capital from the trust.
Seraphim Space is seeing lots of opportunities to deploy the capital raised via its recent C share issue. Following the additional investments in Pixxel and Zeno Power, Seraphim Space has now deployed more than £40 million of these proceeds. A partial conversion of the C shares into ordinary shares is expected to be triggered at the end of the current quarter.
