Science : Disrupt – Future Space, 24/10/16

We do things not because they are easy, but because they are hard…

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ABOUT SERAPHIM

• 2006 £30m ‘Super Angel’ Fund

• 2016 £83m Space Tech Fund (tbc)

• Series A investor

• IP-led businesses

• Platform technologies

• B2B > B2C

• Commercial validation

• Product / market fit (momentum)

• Focus on well defined, directly addressable markets

• Patient capital: long exit horizons

[About Me]

• Dyslexic historian (UCL ‘02)

• Involved in London’s innovation / start-up & investment community since 2000

• 2x failed entrepreneur (‘00-’03, ‘12-’13) – learnt a lot of lessons the hard way…

• Started, advised, invested in 40+ companies in UK, Europe, US & India

• VC since ‘06 – a lot has changed since then….

• Anti social media, pro Singularity

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Linear views disguise continual (and exponential) advancement, making future hard to predict

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Law of accelerating returns – continual biological & technical evolution at an ever faster pace

Singularity 101: Learn to G.R.I.N. and bear it (it could be less than 30 years away….)

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…and this relates to Space how? (We’ll get on to this shortly….)

The entrepreneurial challenge: how special are you?

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Understanding a VC’s mindset: success is rare and tends to be binary…

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• Long term VC returns:

• 1 in 2 investments fail

• 1 in 10 are a major success

• ‘Power Law’ - c.10% of investments delivering c.60% of value

• Therefore essential to focus on investing in top 1% of opportunities

• 1 in 10 major success = <1 in 1,000 investment opportunities

Investments

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Standing out from the crowd can be tough….

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…especially when VCs have such short attention spans…

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…ok, but seriously, what does all this have to do with Space?

Why a Space Fund? Well, Star Wars is back, and Space is cool again…

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Space is already part of everyday life – we interact with satellites 36 times each day

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Our reliance / use of satellites is set to grow exponentially

A 100x decrease in the economics of space is a once-in-a-generation game changer…

• Economics of space now pro VC

• Catalysing new applications

• 90s = low cost personal computing

• 00s = low cost cloud computing

• ‘10s = low cost access to space

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…and a diverse ecosystem* of ‘New Space’ companies is already developing…

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* And this is ‘just’ the upstream

ecosystem – downstream ecosystem

of space-related companies = many

times larger

Tech billionaires & their companies are leading the charge in a new ‘space race’….

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…with VCs (in the US at least) following their lead, investing in emerging category leaders

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Space tech market attracted 2x as much money in 2015 as in past 3 years combined

• Founders Fund

• Khosla Ventures

• Bessemer Venture Partners

• Sequoia

• Y Combinator

• DFJ

World’s first venture fund to focus on space at a time of radical changes within the sector

• £83m fund - £50m first close end of Oct’16 (fingers crossed…)

• Focus on fusion of terrestrial tech with space applications

• New Space, A.I., robotics, nanotechnology (and more)

• Backed by leading space companies & ESA

• Target IP-led businesses & spin-outs from space corporates

• CTO of Google Earth & Google Maps joining Seraphim team

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• Space enabling tech opportunities

• AI, robotics, drones, nanomaterials,

• Software opportunities

• Navigation, satellite imagery, comms

• Hardware opportunities

• Nanosats, space energy, launch vehicles

Investing in tech already addressing, originally derived from or of potential benefit to space

Fund will focus on investment opportunities that are IP-led, software-centric, or the ‘spades and shovels’ businesses

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Deal flow is already covering a broad array of areas, with earth observation the #1 area

Earth Observation• Video• Data analytics• Agritech• Insurance• Resources

Cubesats• Earth Observation• Satcoms / IoT• Plane tracking

Launch Vehicles• Micro sats• Space tourism

Robotics / Automation• Drones / UAVs• 3D printing

Exploration• Microgravity research• Asteroid Mining

Consumer• 3D mapping• Geodata / LBS

Hardware• Propulsion• Deployable structures• Life extension

New Materials• Composites• Coatings• Energy storage• Energy harvesting

Satcoms• Marine• IoT• Mobile

Size = indicative volume of deal flow

Key

The European venture market is developing rapidly, with London / UK the dominant force

Europe’s start-up ecosystem has come along way…

• 47 EU unicorns ($1bn+ valuations)

• EU unicorns far more capital-efficient than US

• US unicorns raise 2x capital, 5x more venture funding

• EU produces 2x STEM grads than US

UK dominates EU VC Market…

• #1 venture market >35% total market

• #1 unicorns (18/47 in EU)

• c.3x growth in VC funding since ‘11

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London is a thriving tech hub…

• 4 of the world’s top universities

• 60+ Incubators, accelerators and tech hubs

• London >2k business angels (>5x #2 EU hub)

• London 72k s/w developers c/w 83k San Fran

• San Fran = 1.5x higher salaries c/w London

Harwell is Europe’s leading space cluster

• 4,500 researchers, engineers, innovators

• 150+ high tech space companies

• 1 / 14 ESA incubators

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Artificial Intelligence Robotics Nanomaterials New Space Earth Observation

james@seraphimcapital.co.uk

www.seraphimcapital.co.uk

Thank You!