Seraphim Space Fund - Quarter 1 2021

Q12021 Seraphim Space Fund Quarterly Report (To 31 Mar 21)

Letter from the Chairman Dear Limited Partner Please find enclosed the report for the Seraphim Space Fund covering the quarter ended 31 March 2021.

Update & Overview As at 31 March 2021, the Fund had invested £32.92m in 19 portfolio companies with further anticipated commitments of approximately £2m to existing portfolio companies expected to crystallise during Q2 2021. £1.00m was drawn down during Q1 2021 and the total now stands at £39.00m, equivalent to 58.4% of total committed capital. A further £28.52m is still available to draw down.

The overall portfolio valuation now stands at £72.20m compared with a cost of £32.92m, representing an IRR of 30.8% and gain of 119% against cost, compared with a 36% gain at the end of Q4 2020. The movement in Q1 reflects an additional £0.25m invested in the portfolio together with a net change in valuation of £27.63m, principally from the significant uplift in ArQit following the announcement of its Special Purpose Acquisition Company (SPAC) merger, shortly after the quarter end (see below).

As reported in Q4 2020, the Fund is in the final 12 months of its 5 year investment period and therefore only a limited number of new investments are expected. Following the high level of investment activity in Q4 2020 (three new portfolio companies and two follow-on rounds), Q1 saw one small follow-on investment (in SatelliteVu).

02

“ArQit announces intention to IPO via SPAC merger” Another notable development was D-Orbit’s post Q1 signing of a term sheet for a potentially very substantial transaction. Due to confidentiality restrictions, we are unable to share further details at this time but would hope to be in a position to do so in the Q2 report.

Most of the portfolio is funded through 2021, with a few companies raising new rounds in the year.

Other Developments Outside the Fund’s investment activities, Seraphim Space Camp Accelerator is completing Mission 7 in May, with seven companies graduating from the UK, Europe, US, and India. The alumni have now closed $67m in equity funding.

In addition, Seraphim was recently selected to be the delivering partner for the new AWS Space Accelerator. Launching in June, the accelerator is highly complementary to our own activities and focuses on later stage companies. As the leading cloud platform provider in the world, the AWS (Amazon Web Services) decision is a great acknowledgement of our position in the global domain.

The Seraphim Space Index, which tracks all VC investment into the space market globally, highlighted Q1 2021 as another strong quarter for private equity investment, continuing the positive momentum of 2020. It also reported on the growing appetite of public market investors for space companies, with $7bn earmarked to fund 11 SPAC mergers in the sector.

Record levels of investment are being committed by the private and public equity markets, demonstrating widespread belief in the transformative potential of Space Tech.

Finally, we recently disclosed to you plans regarding the potential formation of a listed Investment Trust into which your holdings in the partnership would effectively be converted. This has received unanimous LP support and the process is underway, with a target IPO date of 30 June.

Since our previous reporting of the Spire and AST & Science IPOs (via SPAC mergers), the highlight of the period was the mid-May announcement of ArQit’s SPAC merger with Centricus Acquisition Corp. This transaction represents a huge moment for the UK Space Tech sector, with ArQit set to be the first UK space company to enter into a business combination transaction with a US publicly listed SPAC, at an enterprise value of approximately $1bn.

Kit Hunter Gordon Chairman

Kind Regards

About Seraphim Space Seraphim Space Name of Fund:

Seraphim Space LP

Fund Address:

167 City Road, London, EC1V 1AW, UK

General Partner:

Seraphim Space (General Partner) LLP

Management Company:

Seraphim Space (Manager) LLP

First Closing Date:

28th October 2016

Final Closing Date:

21st July 2017

Vintage:

2016 / 2017

Total Commitments:

£67million

Reporting Currency:

£GBP

Term:

10 years

Investment Period:

5 years

Domicile:

United Kingdom

Legal Form:

Limited Partnership

Investors:

69 Limited Partners (British Business Bank, Space Corporates, Family Offices, HNWIs)

Investment Focus:

SpaceTech

Investment Focus by Geography:

Global – companies demonstrably for benefit of UK economy

Founded in October 2016, Seraphim Space is a £67m venture capital fund managed by Seraphim that focuses on backing the future category leaders to emerge from the ‘New Space’ revolution. The Fund is backed by some of Europe’s leading Space corporates including Airbus and SES. With an onus on the fusion of terrestrial technology and Space applications, the Fund seeks to make initial investments of between £0.1m and £5m into IP-led tech businesses already addressing, originally derived from, or of potential benefit to the Space sector. As at 31 March 2021, Seraphim Space had invested £32.92m in 19 portfolio companies.

Backing businesses collecting and communicating data from above

We segment the Space Tech ecosystem into the following 6 categories: Build – Building and selling satellites and drones. We look at both the hardware (sub-systems, complete platforms and novel sensors) and software (i.e. mission control, cybersecurity).

Launch - Building and launching rockets, offering launch aggregation and services. We also consider autonomous flight such as drone delivery.

...and the broader technologies that support the full ecosystem

Data – Satellite constellations, high altitude pseudo satellite (HAPS) platforms and drones collecting and communicating proprietary data, in earth observation, communications and navigation.

Downlink – Technologies facilitating the transmission and storage of data from space and aerial platforms back down to earth. This includes phasedarray antennas, laser communications, inter-satellite data relay systems, quantum security, data storage, and ground stations.

Analyse – Changing low-level processed data into valuable insights, offering a subscription service to enterprise customers. Includes the analysis of data from space and aerial platforms using machine learning techniques.

Enabled applications tailored to specific verticals...

GOVERNMENT

For more information explore seraphimcapital.co.uk

Product – Packaging of different data streams (fusing space and terrestrial sources), tailored to specific use cases in discrete verticals. This includes data platforms such as space and drone traffic management, mapping platforms and precision location & tracking.

03

Portfolio Overview Company Profiles Seraphim’s portfolio currently consists of 19 companies (including UltraSoC – sold 2020) spanning the entire Space Tech ecosystem. The following table and charts show the split, by number of portfolio companies, across each area of the space value chain, segmented into Seraphim’s ‘data lifecycle’ (Build, Launch, Data, Downlink etc.) as well as by company stage.

Portfolio Company

04

Sector / Sub-Sector

Initial Investment Stage

Description

Data / Satellites – Series B

Earth Observation

Spire Global operates the world’s largest constellation of ‘listening’ nano-satellites tracking radio frequency signals relating to ship and aircraft tracking, and weather data.

Data / Satellites – Series A

Earth Observation

Iceye operates the world’s largest constellation Synthetic Aperture Radar (SAR) satellites capable of ‘seeing’ the earth both at night and through clouds.

Data / Drones & UAV Pre-Series A

Nightingale provides customers with security drones that deploy autonomously when activated by the security system.

Product / Data Platforms Pre-Series A

Altitude Angel provides an air traffic control platform for drones providing the backbone for the integration of manned and unmanned air traffic.

TransRobotics has created software-defined digital radar, providing machine vision at ultra low cost.

Build / Electronics Pre-Series A & Robotics

Product / Data Platforms Series A

LeoLabs is developing a network of ground-based phased array radars that can track assets in space & debris as small as 2cm.

Store / Data Storage Pre-Series A

& Processing

Bamboo Systems is repurposing commercial off-the-shelf (COTS) smartphone ARM processors to build a novel server architecture applicable to multiple sectors including aerospace.

Launch / Launch Services Series A

D-Orbit provides in-orbit space transportation services to small satellite operators through its space taxi. It also provides decommissioning services to satellite operators.

Build / Software Series B

& Engineering

UltraSoC’s silicon IP and software provides visibility and analysis of the operation of the hardware and software in any electronic system.

UltraSoC was sold to Siemens in July 2020 and escrowed funds remain due.

Analyse / Satellites Seed

Planet Watchers applies artificial intelligence to synthetic aperture radar data within the insurance and agriculture sectors.

Data / Satellites – Series B

Telecoms

AST is building the first space based cellular broadband network to be accessible by standard smartphones without any additional hardware or software.

Analyse/Drones & UAV Series A

Edgybees provides a real time geospatial analytics platform for augmented spatial awareness and GPS denied navigation for UAVs.

Downlink / Ground Series A

Terminals

Isotropic Systems is developing the world’s first high bandwidth and low power flat panel terminal that can simultaneously connect to multiple satellites.

Portfolio Overview Seed Portfolio Portfolio Company

Sector / Sub-Sector

Initial Investment Stage

Data / Satellites - Seed Telecoms

Description ArQit is developing a constellation of satellites that use quantum key distribution for cyber security related applications.

Downlink / Seed

Communications

QuadSAT has developed a drone-based platform for testing and calibration of satellite antennas deployed in high-value maritime and aeronautical markets.

Data / Satellites Seed

Xona is developing a global positioning (GPS) small satellite constellation to enable highly secure precise location and tracking services for autonomous vehicles.

Downlink/Security Seed

& Storage

Nu Quantum has developed advanced single photon quantum photonics systems, integral to building quantum secure communications infrastructure.

Build / Software Seed

& Engineering

Opteran is developing neuromorphic integrated chips for advanced computer vision and decisioning capabilities in autonomous systems.

SatelliteVu is developing the world’s first constellation of mid-wave infrared small satellites for high resolution and revisit thermal imaging.

Data / Satellites – Seed Earth Observation

Portfolio Companies by Seraphim Data Lifecycle

■ Analyse ■ Build ■ Data ■ Downlink ■ Launch ■ Product

Portfolio Companies by Initial Investment Stage

■ Post Series A ■ Series A ■ Pre- Series A

05

Team Kit Hunter Gordon (Chairman & Managing Partner) Kit is representative Managing Partner of The Summit Group, a diversified financial group. As the founder CEO of The Summit Group, Kit has invested in more than 40 early-stage businesses over the last 30 years. Previously he was managing director of a subsidiary of J Rothschild after being with JP Morgan in London and New York.

Mark Boggett (CEO & Managing Partner) Mark has 22 years of venture capital and technology investing experience. He was previously a main board director of YFM Equity Partners, having trained as an equity analyst / fund manager at Williams de Broe and Brewin Dolphin. He is also currently Chairman of the London Co-investment Fund.

James Bruegger (Managing Partner) James has 20 years’ experience of start-ups and venture capital, having started, advised and invested in 50+ companies in UK, Europe, US and India. He joined Seraphim in 2006 having previously founded several start-ups and worked at Burlington Consultants, a boutique strategy consultancy specializing in M&A that was acquired by Deloitte.

Paul Thomas (Managing Partner) Paul has over 35 years of venture capital and private equity experience. He is the Managing Director of Pi Capital, having previously been Managing Partner of ECI which invested in more than 100 companies during his 19 years with the firm. Paul helped ECI to raise over £400m across 5 successive funds. He is also chairman of the investment committee for the Ventus VCT listed green energy funds.

Anthony Clarke (Managing Partner) Anthony has over 20 years of early-stage venturing experience.

He is an Investment Committee member of Newable Ventures (formerly London Business Angels), one of the UK’s longest established and most active angel groups. He is the former Chairman of the UK Business Angels Association, President Emeritus of the European Business Angel Network (EBAN) and Chairman of EBAN Space.

Matt O’Connell (Investment Advisory Committee) Matt is the former President and CEO of GeoEye, a provider of satellite and aerial imagery and geospatial information products. Starting in 2003 he grew GeoEye from 60 employees to become publicly traded on NASDAQ and an eventual sale to DigitalGlobe in 2013 for $1.3bn. He was then CEO of OneWeb from 2015 to 2016. Matt is also an Operating Partner at US venture firm DCVC.

06

Candace Johnson (Venture Partner) Candace has a long and distinguished career as founder/cofounder of such space ventures as SES ASTRA, SES Global, LoralTeleport Europe, Europe Online, as well as having played critical roles in bringing about space sector leaders including Iridium and ILS. An experienced venture capitalist and investor, Candace has been a member of the Strategic Committee of Iris Capital for the past decade and until recently has served as President of the European Business Angel Network.

Rob Desborough (Investment Director) Rob has over 15 years technology venture capital experience in both Investment and operational roles from start-up through to early stage, growth, development and AIM floats. Prior to Seraphim Rob was with YFM Equity Partners as an Investment Director working across London Seed Capital, The Capital Fund and the British Smaller Companies VCT plc.

Jeff Crusey (Investment Manager) Jeff has over 10 years deep technology venture capital investment and operational experience from founding through growth and exit. Prior to Seraphim Jeff led strategy at Viasat, a global satellite communications company, overseeing M&A and early-stage investments. Previously he co-founded DeepSee, developing next generation optics and computer vision for AR/VR and lead climate tech investments at DTE Energy Ventures.

Josephine Millward (Head of Research) Josephine has more than a decade of experience in investment/ equity research following the aerospace industry and a wide range of small-to-mid cap Defence and Security Technology companies. Most recently she worked at the Benchmark Company. She began her equity research career at JP Morgan and received her MBA from Georgetown University.

Lewis Jones (Investment Analyst) Lewis holds a First-class Aeronautics and Astronautics MEng degree from the University of Southampton, specialising in Spacecraft Engineering. He has worked as a Thermal Analyst in the Rotatives department at Rolls-Royce, primarily focusing on the safety aspects of jet engines on Civil Aircraft.

Christiana Okolie (Executive Assistant & Office Manager) Christiana joined the Fund from Deloitte where she was Executive Assistant to three partners. She previously spent 10 years working for a fashion wholesaler as a PA, Office Manager and Accounts Department Manager.

Fund & Investment Summary 31/03/2021

31/12/2020

Investment Metrics (£m)

Capital committed

66.80

66.80

32.92 32.67

Capital drawn down

39.00

38.00

Total Invested To Date In Portfolio Companies1

Repaid General Partner’s Share

0.72 0.72

Total Additional Committed to Portfolio Companies

0.25 0.25

Capital Account (£m)

31/03/21

31/12/20

Net capital drawn down

38.28 37.28

1.28 0.98

Fair value of current portfolio

Next Quarter Forecast Drawdown – British Business Bank

70.16 42.53

0.30 0.65

Current assets

5.72 5.05

Next Quarter Forecast Drawdown – Other Fund Investors

Current liabilities

(5.91) (0.12)

Distribution - Government Priority Return

0.97 0.97

Distribution - Capital to Limited Partners

0.35 0.35

1

LESS:

Realised gains/losses

0.71 0.71

Gain/(loss) on revaluation at FV

38.19 10.85

Operating profit/(loss)

(5.89) (0.06)

38.28

37.28

The investment metrics table above is designed to give investors an overview of the historic and forecast rate of investment by the Fund. It therefore provides a view on cumulative investments to date and any additional investments not yet completed during the quarter, but which have been committed/allocated for known future investments. It also provides an estimate of the likely drawdown for the quarter following the relevant reporting period, along with the relevant estimate from the previous quarter.

Fund Value (£m)

As per the Capital Account detailed above, total drawdowns from the Fund’s limited partners stood at £39.00m as at 31 March 2021, reflecting an increase of £1.00m from the previous quarter. The Fair Value of the portfolio stood at £70.16m compared to cost of £31.59m.

80

31/03/21

31% 14%

Distributions to paid-in capital (DPI)

5%

5%

Residual Value paid-in capital (RVPI)

179%

125%

Total value to paid-in capital (TVPI)

185%

130%

The Fund Metrics Table above includes some of the standard industry metrics for measuring fund performance. The Gross IRR is calculated on the basis of funds drawn down/contributed to date, a combination of realisations to date and an assumed liquidation at the Net Asset Value (NAV) as at the end of the current reporting period. Distributions to Paid in Capital (DPI) is calculated by dividing the realisations to date by the funds drawn down to date. Residual Value Paid in Capital (RVPI) is calculated by dividing NAV by the funds drawn down to date. Similarly, Total Value to Paid in Capital (TVPI) is calculated by combining NAV and distributions to date and then dividing this by funds drawn down to date.

69.98 (5.83)

60 50

47.46

1.00

40 30 20

31/12/20

Gross IRR

27.34

70

Current assets increased from £5.05m to £5.72m during the quarter. The gain on revaluation at Fair Value increased from £10.85m to £38.19m, driven principally by the uplift in valuation of the Fund’s holding in ArQit. Fund Performance Metrics

Cost of investment reflects actual cash invested and excludes converted loan note interest

■ Increase ■ Decrease ■ Total

10 0 Opening Contributions Less GPS Distributions Unrealised Realised Operating Closing NAV Repaid FV Gains Profit NAV

Totals are subject to rounding

The Fund Value chart above shows how the Fund’s NAV has changed during the current reporting period. As per the chart, the Fund’s NAV increased from £47.46m to £69.98m as at 31 March 2021. This increase in NAV was largely due to a further £1.00m in additional draw downs and an increase in Unrealised Fair Value of £27.34m from £10.85m to £38.19m. The Operating loss was largely due to Accrued Carried Interest.

As the Fund develops over time, these metrics will become a useful benchmark for assessing the Fund’s performance when measured against other funds of an equivalent vintage (ie 2016/2017) and equivalent stage (ie early stage venture).

07

Portfolio Summary The Seraphim Space Fund Current Portfolio as at 31st March 2021 (£m)

Date of Initial Seraphim Data Investment Lifecycle Stage

% Equity Cost as of Cost as of Holding 31/12/20 Additions 31/03/21

FV as of FV as of FV/Cost 31/03/21 31/12/20 31/03/21

Main Portfolio Spire Global Inc

Jan-17

Iceye Oy Nightingale Security

Data

Growth

0.8%

2.94

-

2.94

5.04

3.12

171%

Aug-17

Data

Growth

4.0%

4.00

-

4.00

10.05

10.72

251%

Oct-17

Data

Early

5.9%

3.82

-

3.82

-

-

0%

Altitude Angel Ltd

Dec-17

Product

Early

18.6%

3.50

-

3.50

3.71

3.71

106%

Transrobotics Inc

Dec-17

Build

Early

21.6%

1.10

-

1.10

0.54

1.10

49%

Bamboo Systems

Oct-18

Downlink

Early

33.3%

3.62

-

3.62

1.29

2.55

36%

LeoLabs Inc

Dec-18

Product

Early

4.9%

2.15

-

2.15

2.84

3.02

132%

Planetwatchers Ltd

Jun-19

Analyse

Early

40.0%

1.65

-

1.65

1.65

1.65

100%

D-Orbit S.p.A

Apr-19

Launch

Early

9.7%

2.75

-

2.75

7.28

7.57

265%

UltraSoC

May-19

Build

Exit

-

-

-

-

0.28

0.28

-

AST & Science

Jul-20

Data

Growth

0.4%

-

-

-

3.78

2.94

-

Edgybees

Aug-20

Analyse

Early

5.0%

1.54

-

1.54

1.46

1.54

94%

Isotropic Systems

Oct-20

Downlink

Early

2.8%

1.54

-

1.54

1.45

1.54

94%

28.61

-

28.61

39.36

39.76

138%

Sub-Total (Main Portfolio) Seed Portfolio ArQit Limited

Feb-18

Data

Seed

5.5%

0.88

-

0.88

28.69

0.88

3279%

QuadSAT ApS

Dec-18

Downlink

Seed

14.1%

0.99

-

0.99

1.04

1.02

105%

Xona Space Systems

Mar-20

Data

Seed

5.0%

0.26

-

0.26

0.22

0.26

84%

NuQuantum

Sep-20

Downlink

Seed

1.0%

0.10

-

0.10

0.10

0.10

100%

Opteran

Nov-20

Build

Seed

3.6%

0.25

-

0.25

0.25

0.25

100%

SatelliteVu

Dec-20

Data

Seed

15.2%

0.25

0.25

0.50

0.50

0.25

100%

Sub-Total (Seed Portfolio)

2.73

0.25

2.98

30.80

2.77

1034%

Sub-Total (Combined Portfolios)

31.34

0.25

31.59

70.16

42.53

222%

1.33

-

1.33

2.04

2.04

154%

Realised Gains(Losses) UltraSoC

May-19

Jul-20

Post Series A

5.0%

Sub-total Realised Gains (Losses) 1.33 TOTAL / AVERAGE Note totals are subject to rounding.

1

Cost of investment reflects actual cash invested and excludes converted loan note interest

2

Includes convertible loan notes treated on an as if converted basis

3

Retained consideration held in escrow, expected to be realised in January 2022

It is worth noting that the Fund’s investments in Spire, Iceye, Nightingale, TransRobotics, LeoLabs, PlanetWatchers, Xona Space Systems, AST, Edgybees, and Isotropic are all denominated in US dollars. The Fund’s investment in QuadSAT is denominated in Danish Krone and in D-Orbit in Euros. On the advice of the Fund’s auditors, we are now reflecting any changes in Fair Value attributable to changes in the Sterling /Local Currency exchange rate quarter to quarter. Hence the valuation methodology is currently to recognise the cost of the investment, or the valuation established at the most recent funding round. As with any implied changes in Enterprise Value, changes in Fair Value due to variations in FX rates are recognised at the foreign exchange rate at period end.

08

32.67

-

1.33

2.04

2.04

154%

0.25

32.92

72.20

44.57

219%

The total cost of the total Portfolio (including UltraSoC) stands at £32.92m.

The Fund chart above shows the increase of the Fair Value of the Fund as a result of a small follow-on investment into SatelliteVu as well as a large increase in the Fair Value of ArQit, for Total Fair Value of the Fund of £72.20m (including the realization of UltraSoC). The ratio of the Fair Value of the Current Portfolio against the Cost of investment has risen from 136% reported last quarter to 219%.

Portfolio Summary The fund chart below shows the build-up of the Fund value as at 31 March 2021 and takes into account cost, new investments, and valuation adjustments. The primary driver this period was the fair value increase for ArQit, driven by its SPAC merger announcement. The increase in ArQit’s fair value reflects the enterprise value agreed as part of the pre-IPO funding relating to the me that was committed during the quarter, less a 20% marketability discount.

Q1 2021 gross portfolio value progression (£m) ■ Q1-­21Investment ■ Q1-­21 FV Increase ■ FV Increase as at Q4-­20 ■ Cost as at Q4-20 ■ Q1-­21 FV Decrease ■ FV Decrease as at Q4-20

£14.5

£72.2

Rest of Portfolio

Total

£3.8 £2.8 £5.0 £7.3

£10.0

£28.7

ArQit

Iceye Oy

D-Orbit

Spire

LeoLabs

AST

Portfolio Performance Summary The chart below summarises each main portfolio company’s performance against our expectations, along with the current stage of the business. The colour and direction of the arrows indicate recent movements within the chart. Please see trading updates for the respective companies for further information

Company Performance

Good

Average

Bad

Seed

Pre Series A

Series A Company Stage

Series B

Series C+

09

Main Portfolio Update Financial Forecasts

Spire Global, Inc.

Y/E 31st Dec ($m)

Website: www.spire.com Sector / Sub-Sector: Data / Satellites

*

Stage: Growth Location: Glasgow, San Francisco, Boulder, Singapore, Luxembourg Fund’s Role: Follower Co-Investors: Bessemer Ventures, RRE Ventures, Promus Ventures, Airbus Fund Representation: Information Rights Type of Holding: Series C Preference Shares Valuation Method: Marketability Discount to pre-money IPO funding

Investment History Date

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size ($m) value ($m)

Jan 17

1.00

0.3

1.63

1.2

239.8

Aug 17

0.39

0.1

0.51

23.3

301.4

Oct 17

1.14

0.2

1.54

22.6

324.6

Jul 19

0.41

0.2

1.36 40.6 270.01

2019 Actuals* 2020*

2021 Forecast

Revenue

18.5 28.0 53.9

EBIT

(27.6) (21.8)

(18.2)

Unaudited figures

Trading Update From Managing Partner Mark Boggett Spire’s strong growth recently culminated in it going public through a merger with the Special Purpose Acquisition Company (SPAC) NavSight Holdings, Inc at an enterprise value of $1.2bn. It will list on the NYSE under the ticker symbol SPIR when the transaction closes, which is expected in summer 2021.

Seraphim will be locked in for an initial 12 month period post listing. The deal also secured $245m in private placement investment, which was led

by Tiger Global Management.

The company expects to have $475m in total capital at the close of the merger. The uplift in Seraphim’s fair value is reflected in this report, discounted by 20% for lack of marketability.

2

TOTAL 2.943 0.8 5.04

Mark Boggett

Company Overview Spire is one of the world’s leading ‘New Space’ companies, operating the world’s largest constellation of ‘listening’ nanosatellites that collect radio frequency (RF) data to deliver deep insights into the 75% of the world which comprise oceans and uninhabited areas where collecting data is notoriously difficult. Leveraging its software-defined radio technology, Spire is unique amongst current nanosat constellations in being able to use multiple payloads on its satellite constellation to collect wholly different datasets simultaneously, enabling it to fuse different datasets to deliver high value proprietary analytical insights, whilst seeking to monetise its constellation in multiple different markets / applications. Spire’s initial applications include maritime, aviation and meteorology.

Rationale for Investment The $6bn satellite weather market represents the next major growth opportunity in the ongoing commercialisation of the Space sector and stands at a tipping point analogous to that of both the launcher and earth observation (imagery) markets before it. As with these markets, a limited number of private companies are ultimately likely to dominate. By virtue of having proprietary weather data offering much higher vertical resolution with greater observational frequency, Spire has unique access to what holds the potential to become the single biggest driver of accuracy in weather forecasts globally. There is a strong precedent of high strategic premiums being paid for businesses with proprietary weather datasets and public markets likewise placing premium valuations on equivalent vertically integrated data analytics businesses.

Exit Strategy Once Spire has validated the efficacy of both its weather data and the accuracy of its own global weather forecast model, it is likely to become an attractive acquisition target. The company may also look to explore the option to IPO once the business is more proven out.

10

1

Maximum pre-money valuation for convertible loan note holders, based on latest convertible loan note funding round. The Fund has downside protection with liquidation preference.

2

Includes interest accrued from loan note

3

Cost of investment reflects actual cash invested and excludes converted loan note interest.

Main Portfolio Update Financial Forecasts

Iceye Oy

Y/E 31st Dec (€m) Revenue EBIT

Website: www.iceye.com Sector / Sub-Sector: Data / Satellites Stage: Growth Location: Helsinki, San Francisco, London, Warsaw Fund’s Role: Follower Other Investors: True Ventures, Draper Funds, Tesi, OTB, New Space Capital, Promus Ventures Fund Representation: Board Observer Type of Holding: Series A, B & C Preference Shares Valuation Method: Last funding round

Investment History Date

1

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size ($m) value ($m)

Aug 17

0.89

1.6

3.98

1.2

28.8

May 18

1.95

2.0

4.98

33.7

60.0

Dec 19

1.16

0.4

1.09

87.0

260.0

Total1

4.00

4.0

10.05

2019

2020

2021 Forecast

1.2 7.9 22.4 (17.6) (35.3)

(28.1)

Trading Update From Managing Partner James Bruegger As we reported last quarter, Iceye successfully launched three additional satellites in January, bringing the total number of satellites it has launched to 10. This means that Iceye now has the world’s largest constellation of SAR imaging satellites.

Other notable developments during Q1 included the opening of the company’s satellite manufacturing facility in the US. This will enable the company to manufacture/assemble complete satellites in the US, a requisite for selling into some of the larger Department of Defense contracts. The expansion of Iceye’s US operations has already yielded significant dividends, with the US division closing bookings of $1.8m in Q1.

The company also announced a strategic partnership with Swiss Re – one of the world’s largest reinsurance companies – for using Iceye’s SAR data and analytics to develop an early warning system for flood detection.

Totals subject to rounding

Company Overview Iceye has developed the world’s smallest miniaturised Synthetic Aperture Radar (SAR) satellite that costs less than 1/100th of a traditional SAR satellite. SAR can ‘see’ the earth, both at night and through clouds. Iceye is developing a constellation of low-cost SAR satellites with the ability to image anywhere in the world every 2-6 hours, providing it the capability to take 4-12 images a day of any location. Allied to advancements in machinelearning led image analysis, this holds the potential to significantly change the Earth Observation industry’s data paradigm by enabling SAR-based change detection at a global scale for the first time.

Revenues in the quarter were above budget, exceeding $10m, albeit bookings were behind plan due to the slippage of several large data acquisition deals that are now expected to close in Q2.

With more than $40m of cash at the end of the quarter and substantial receipts still due from the large satellite sale contracts closed in the previous quarter, the business remains very well capitalised.

James Bruegger

Rationale for Investment Iceye is looking to use a low-cost constellation of smallsats to disrupt government-dominated incumbents on the basis of price and high temporal resolution with a vertically integrated model. Iceye’s impressive young founders have built a highly capable technical team supported by world class, industry veteran advisors in both the technical and commercial aspects of SAR market. This stands the business in good stead to execute on the operational complexities of its vertically integrated model. As the first company globally to miniaturise Space-grade SAR successfully, Iceye has the opportunity to build a next generation SAR satellite company, capable of potentially surpassing the scale achieved by current industry incumbents. The latent demand for higher temporal resolution, lower cost SAR data is clear, suggesting that there should be a large readily addressable market opportunity for Iceye to attack.

Exit Strategy Once Iceye has validated its satellite design in Space and opened the market for data sales/analytics or sales of satellite systems to emerging markets, then it is likely to become an attractive acquisition target.

11

Main Portfolio Update Financial Forecasts

Nightingale Intelligent Systems, INC.

Y/E 31st Dec ($m)

Website: www.nightingalesecurity.com Sector / Sub-Sector: Data / Drones & UAV Location: San Francisco, Harwell (UK) Fund’s Role: Follower Other Investors: Angels, Coretronics, Impact VC, Hajaj, BVM Fund Representation: Board Observer Type of Holding: Common Valuation Method: Full provision

Investment History Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size ($m) value ($m)

Oct - Dec 17

2.08

3.0

0.00

5.6

22.0

Dec 18

0.79

1.5

0.00

6.3

25.6

Sep-Dec 19

0.95

1.4

0.00

2.5

32.0

Total

3.82

6.0 0.00 1

2

1

Totals subject to rounding

2

100% provision applied to fair value of investments in Nightingale Q1 2020

Company Overview Nightingale has developed an autonomous aerial security drone to enhance physical security at large, sensitive facilities. The installed drone integrates with the customer’s security system and, when a sensor is triggered, the drone autonomously deploys from its hangar and flies to the alert location, all the while streaming video to the security team’s existing CCTV management system. Nightingale is initially looking to enhance existing security teams through more persistent surveillance and greater deterrent. Nightingale introduces cost savings, while boosting security capability, and eventually plans to replace guard roles with its quasiautonomous drones.

Rationale for Investment The physical security market is enormous, with constant cost pressures and few genuine technological breakthroughs that can improve efficiency.

Nightingale has first mover advantage in a very large market, with a large pipeline of corporate customers looking for an initial deployment of c.1-2 drones. Each holds the promise of requiring not just a greater number of drones for its site, but also a clear path to wanting to roll out Nightingale’s technology to numerous other sites once they are satisfied with the performance of the first site. As a first mover in autonomous drones, Nightingale can build a defensible IP portfolio necessary for operating autonomous drones in other markets. This could be tremendously valuable as the ecosystem matures over forthcoming years. Furthermore, the nexus of drones / robotics / automation with the physical security sector provides Nightingale with a range of different groups of highly acquisitive potential buyers.

Exit Strategy The company aims to establish initial drone installations at blue-chip companies. Once Nightingale has validated the security drone as a service model, it is likely to become an attractive acquisition target.

12

2020 forecast

2021 Forecast

Revenue

1.2 1.0 NA

EBIT

(5.6) (3.2) NA

Trading Update From Managing Partner Mark Boggett Sales momentum continues to develop, with the company closing a record $2.6m of bookings during Q1. The biggest contract was with shareholder Hajaj to address Saudi Arabia and the Middle Eastern markets with 20 systems over the next 18 months.

Other deals closed included a US Airforce SIBR grant and a two-system demo with AWS. The broader sales pipeline also developed over Q1, with $2m in direct deals and $3.5m through resellers.

Stage: Early Revenue

Date

2019

Flying ‘Beyond Visual Line of Sight’ (BVLOS) remains the key regulatory inhibiter of the business (and the broader sector) and a detailed programme of test solutions is underway to present to regulators during Q4 2021.

Plans to list the business on the Australian stock market have slipped but remain a core focus of the business during 2021. Cashflow has improved thanks to bookings and a second $278k PPP (US Covid Government loan) providing enough cash to sustain operations a further 6 months into January 2022. Despite the improving outlook we will retain our full provision until we have evidence of strengthened management team and sustained improvements on product performance.

Mark Boggett

Main Portfolio Update Financial Forecasts

Altitude Angel Ltd

Y/E 31st Dec (£m)

Website: www.altitudeangel.com Sector / Sub-Sector: Product / Data Platforms Stage: Early Revenue Location: Reading, UK Fund’s Role: Lead Co-Investors: Angels, Accelerated Digital Ventures, Frequentis AG Fund Representation: Board Seat / Observer Type of Holding: Series A Preference Shares Valuation Method: Last funding round

Investment History Date

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size (£m) value (£m)

Dec 17 – Jan 18 1.75

8.8

1.75

3.4

6.0

Dec 19

1.00

5.0

1.00

1.8

10.7

Jul 20

0.75

4.8

0.96

1.5

14.6

Total 3.50 18.6 3.71

Company Overview Altitude Angel has developed an extensible software platform that provides air traffic control services to drones. The company sells front-end applications delivering specific information to different customer groups: operators, regulators, insurers, drone manufacturers in a form that is easy to consume and visualise. Current air traffic control systems cannot scale to meet the requirements of today’s drone ecosystem, but also that of the anticipated future where millions of drones autonomously navigate airspace and intersect with manned air traffic. Altitude Angel has created such a system and their vision is to become the central data exchange for individual drone fleet management and air traffic control systems worldwide.

Rationale for Investment Drone air traffic control is a fundamental building block without which the drone ecosystem will not be able to deliver on expected hyper-growth.

Altitude Angel has created a system that incorporates raw, real-time aeronautical information from national air traffic controllers and the EU air traffic data exchange, to create the worlds’ most comprehensive map of realtime, dynamic airspace and ground hazard data in over 160 countries. The company has also made the strategically insightful decision to develop the open-source data standard for drone information, which has subsequently been adopted by the industry, and positioned itself as one of only four companies advising the EU on drone legislation. Altitude Angel is well placed to become the de facto drone air traffic control provider, initially on a pan European basis, but ultimately on a global basis too. Should it execute on its vision to organise the world’s aviation information, it will be a hugely valuable company, potentially disrupting the $50bn manned air traffic control market.

Exit Strategy There are many large companies selling into the manned air traffic control market, while Altitude Angel is one of only a limited number of start-ups developing a drone traffic control offering. Soon the two markets will inevitably merge, making Altitude Angel an attractive acquisition target.

2019

2020

2021 Forecast

Revenue

0.2 0.5 3.2

EBIT

(2.0) (1.2)

(0.04)

Trading Update From Portfolio Director Rob Desborough Altitude Angel finished the quarter in a strong position from both a cash and pipeline perspective, although the period has been challenging commercially. The company weathered the pandemic throughout 2020 and came out strongly with the completion of the Octopus investment round, strong product development milestones and team hires. However, the real affect in the sector was seen commercially in Q1, as companies of all shapes and sizes delayed, cancelled or changed their purchasing plans. Recognized revenues are broadly in line with plan, but the slow commercial traction is impacting new business sales.

The company entered the year building out a new remote team with a broad set of targets across multiple customer segments. This has led to an ever-growing pipeline but covering a very broad base. The pipeline has been far slower to contract than expected and has also been adversely affected by the health crisis in other countries, for example in India where a very significant pipeline was building - this has been all but completely paused given the current situation in the country. Covid has delayed all BVLOS trials. On a positive note, Altitude Angel won its first two Guardian UTM Enterprise for Airports customers. Snowdonia Aerospace and Cranfield will act as strong referenceable customers.

Given the challenging commercial picture, the team with Board input has had a comprehensive review of operations to identify key areas of focus and operational changes. The team and board are confident that the targeted £2m+ FYBV target is achievable. .

The focus is now on achieving significant commercial traction in the form of deployments and/or deal closure in Q2 and into Q3. To achieve this the business is focusing its efforts on Enterprise Airports and Councils/ landowners who can be converted in the near term. It will continue to maintain its position with ANSP’s, both in market positioning and responding to RFx’s, but on a more reactive basis. The Board is also looking at Advisory Board candidates to enhancer networks within the different segments.

Rob Desborough

1

Includes interest accrued from loan note

2

Maximum pre-money valuation for convertible loan note holders, based on latest convertible loan note funding round cap

13

Main Portfolio Update Financial Forecasts

TransRobotics

Y/E 31st Dec ($m)

Website: www.transrobotics.com Sector / Sub-Sector: Build / Electronics & Robotics Location: US, UK Fund’s Role: Lead Co-Investors: Niantic Labs Fund Representation: Board Seat / Observer Type of Holding: Series A Preference Shares Valuation Method: 50% provision on cost

Investment History Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size ($m) value ($m)

Dec 17 – Feb 18 1.10

21.6

0.54

1.2

2021 Forecast

Revenue

0.2 0.2 1.5

EBIT

(1.0) (0.1) 0.4

Cashflow remain tight but is being well managed. The US Covid support activities have helped address underperformance and the company’s initial PPP loan has already been forgiven. It is now eligible for further support loans, which are in process at the time of writing.

4.5

Total 1.10 21.6 0.54

Company Overview TransRobotics has developed a software-defined digital radar that is several orders of magnitude smaller, lighter, and more powerful than competitors.

Its solution has wide applicability in the areas of drones, automotive, consumer electronics, and Augmented Reality/ Virtual Reality.

To operate effectively, autonomous robots, cars and drones all need to construct a three-dimensional view of their surroundings. TransRobotics leverages commodity wifi hardware, often already a part of the device in question, to offer radar functionality with almost no incremental hardware requirements. The company’s vision is for these digital radars to become a ubiquitous component of virtually all machines / electronic devices.

Rationale for Investment TransRobotics plays to part of the Fund’s core thesis of leveraging consumeroff-the-shelf (COTS) technology from the consumer electronics industry for space-tech applications, and also the theme of sensor miniaturisation.

Software-defined radio has revolutionised the radio industry, catalysing the wifi and cellular capabilities that have underpinned transformational growth over recent decades. TransRobotics’ technology is applying these principles to develop software-defined radar for the first time to fundamentally change the price/performance paradigm of radar, in the process opening a wide array of new applications. This ability to give almost any wifi-enabled device the ability to ‘see’ its surroundings with almost no extra power, cost, or processing complexity is ground-breaking.

Exit Strategy Given the breadth of potential market applications and its promise of offering an entirely new sensing platform at no incremental cost, we believe there are a diverse range of potential acquirers for TransRobotics. Many of these parties are highly acquisitive and willing to pay strategic premiums to acquire ‘must have’ technology early, in order to maintain market position.

14

2020

Trading Update From Managing Partner Mark Boggett The company continues to progress, albeit at frustratingly slow pace. Transrobotics was particularly hit by the Covid induced global shortage in computer chips. Delivery of product to its only contracted customer Cherish was further delayed beyond the quarter as components were held up from China. The relationship with the customer seems much improved despite this setback.

Stage: Early revenue

Date

2019

Engagement with pipeline customers is progressing with parties such as Waymo and SRI. However, given the limited visibility on new customer contracts, we have introduced a 50% provision against the holding. An internal equity round is planned next quarter once the Cherish delivery is concluded.

Mark Boggett

Main Portfolio Update Financial Forecasts

Bamboo Systems Group Limited

Y/E 31st Dec (£m) Revenue EBIT

Website: www.bamboosystems.io Sector / Sub-Sector: Downlink / Security & Storage Stage: Early revenue Location: Cambridge, UK, San Jose, US Fund’s Role: Lead Co-Investors: Opea S.R.L (family office) Fund Representation: Board Seat / Observer Type of Holding: Series A Preference Shares, Convertible Loan Note Valuation Method: 50% provision on Q4 20 fair value

Investment History Date

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size (£m) value (£m)

Oct-18 0.35

1.8% 0.093 0.90 5.30

Apr 19

1.90

10.3%

0.48 2.60 5.70

May 20

0.30

21.8%

0.181 0.60 0.00

Jun 20

1.07

N/A

3

0.54

4.28

N/A

Total 3.62 33.3% 1.29 2

1,2

Company Overview Bamboo has developed a new type of server taking advantage of the energy-efficient ARM processors developed for smart phones to create a smaller, cheaper, and more energy efficient design that is 4x more energy efficient, 5x lower cost, and 10x smaller than comparable servers. Servers are found in everything from telecoms towers, industrial robots, to large data centres that are the backbone of the internet. Bamboo is looking to enter the market in niche applications where its advantages of size, price and energy efficiency allow it to dominate.

Rationale for Investment Demand for ever greater data and bandwidth continue to grow, creating large growth in data centres and a server market already worth $80bn a year.

Servers have become commodity with very low margins using a design that hasn’t changed much in 30 years, while 80% of data centre cost is server capex and energy cost. ARM is positioned to become the dominant compute platform for distributed edge computing and next generation applications that will drive future market growth. Micro-servers based on 64bit ARM architecture represent the answer to the needs of energy efficiency, compactness and scalability of modern high-performance workloads and processing at the edge. Bamboo’s technology is especially well aligned with the confluence of satellites, drones and IoT / edge computing. The Space industry’s store / compute / processing requirements are exploding (i.e.

Planet collects 10 terabytes a day, Spire’s global weather forecasting require 500,000 CPUs, 20 petabytes storage) and ARM-based micro-servers will be an important enabler for the wider Space-Tech ecosystem.

Exit Strategy If Bamboo manages to deploy its technology within a number of different customers / applications, this could lead to it becoming an attractive acquisition target. Potential acquirers include server OEMs, server chip manufacturers and hyperscalers looking to bring new server designs in-house.

2019

2020

2021 Forecast

- 0.06 0.3 (1.8) (3.1)

(4.4)

Trading Update From Managing Partner James Bruegger We are pleased to report that shortly after the end of the quarter, Bamboo finally achieved general availability with its next generation ARM server product. Within a matter of weeks first orders for this product had been received from blue chip customers in the natural resources, genomics and academic sectors. The company is now building an encouraging pipeline of other large prospective customers. As first units have only just been shipped to the initial customers in recent weeks, it remains to be seen whether these initial units perform against customer expectations, but early feedback has been positive so far.

Notwithstanding these positive developments, the business has been adversely impacted by the global shortage of microelectronics components. This has seen the entire industry hit by a ‘perfect storm’ of reduced manufacturing capability (some of which is Covid-related) allied to exceptionally strong demand as appetite for connected devices continues to grow (indeed has accelerated during lockdowns / remote working).

This has led to average lead times for components having doubled to more than six months. Worryingly, when current supply in the market is consumed, current expectations on the timescales for replenishing stocks are in some instances taking more than a year.

The impact of these external factors is potentially very damaging for Bamboo. The business remains cash constrained with current cash runway lasting until October and sufficient reserves to manufacture only a few dozen units. This leaves the business in the very difficult position of not being able to respond to growing market demand for its product, but also having insufficient cash to forward order long lead time components to secure supply beyond next quarter.

We are working with management to try to raise additional capital but given the above circumstances we have determined that it is prudent to make a 50% provision against the value of our holding in the company.

James Bruegger

1

Includes interest accrued from loan note

2

Totals subject to rounding

3

A 50% provision against cost had already been made prior to the 50% applied to the Q4 20 fair value

15

Main Portfolio Update Financial Forecasts

LeoLabs, Inc.

Y/E 31st Dec ($m)

Website: www.leolabs.space Sector / Sub-Sector: Product / Data Platforms Stage: Growth Location: US, UK, New Zealand Fund’s Role: Follower Co-Investors: Horizons Ventures, Airbus Ventures, WERU Investment Fund Representation: Board Observer Type of Holding: Series A Preference Shares Valuation Method: Price of the last round

Investment History Date

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size ($m) value ($m)

Dec 18

1.57

4.0

2.30

2.00

37.8

Feb 20

0.57

0.9

0.54

11.5

68.0

Total 2.15 1

4.9 2.84

Company Overview LeoLabs is the leading commercial provider of low Earth orbit (LEO) mapping and Space Situational Awareness (SSA) services. LeoLabs is rolling-out a network of higher frequency, 10x lower cost and patented phased-array radars to offer commercial data services for commercial satellite operators and other key players such as regulators, Space Agencies and insurers. When fully built out, LeoLabs’ radar network of phased array radars will deliver rapid revisit, accurate and precise forecasts of small orbital debris (estimated to be c.500,000 objects).

Rationale for Investment The space situational awareness market is still largely the preserve of military / governments, and spending on hardware, data and software services is significant. All users of space are wholly reliant on the US Air Force (USAF) Space Command (“CSpOC”) for collision avoidance warnings in space. However, CSpOC only tracks objects >10cm in size (c.10% of the total number of space debris objects estimated to be in space). The number of space objects, their combined mass, and their combined area has been steadily rising since the beginning of the space age, leading to the appearance of involuntary collisions between operational satellites and space debris. With its radar network and suite of software services for a range of LEO stakeholders, LeoLabs will be the only commercial entity that can offer a reliable commercial space traffic management service, with a database that tracks 10x more space debris objects than is currently possible and offers accurate and frequent measurements that operators can rely on for their satellite operations.

Exit Strategy If LeoLabs manages to deploy its full radar network and can win significant accounts in its 3 target customer markets, this should lead to it becoming an attractive acquisition target. The most likely acquirers are Aerospace & Defence primes – acquiring a start-up with much cheaper, more reliable and more accurate radar technology, as well as a scalable software platform.

16

2019

2020

2021 Forecast

Revenue

2.6 7.1 18.5

EBIT

(4.2) (3.2) 0.1

Trading Update From Managing Partner Mark Boggett LeoLabs hit the ground running in 2021 with a range of bookings, including commercial customers SpaceX, Rocket Labs, Blacksky, Swarm and government agencies ESA and NOAA. Booked revenue for the year already stands at $10m against a $13m target.

The major milestone for LeoLabs during the quarter was the successful completion of the Costa Rica radar. Despite Covid, construction completed on time and after just one month of calibration the system sensitivity was already comparable to its leading radar in New Zealand. Management applied learnings from New Zealand to great effect, which shaved months off the schedule. Post Q1, the ribbon cutting ceremony in mid-April was attended by the President of Costa Rica. The company now has a cookiecutter approach to its radar development and is stepping up expansion. It plans to add 4 sites to its radar network during the year including Azores, Australia and India (pending contract win).

Outside the quarter, LeoLabs received multiple term sheets for its Series B round, eventually signing with Insight Ventures to raise a further $65m at a $300m valuation. The round was highly oversubscribed and provides the company with the resources to increase the speed of expansion.

Mark Boggett

Main Portfolio Update Financial Forecasts

D-Orbit S.p.A

Y/E 31st Dec (€m)

Website: www.dorbit.space Sector / Sub-Sector: Launch / Launch Services Stage: Early Revenue Location: Italy, UK, US, Portugal Fund’s Role: Lead Co-Investors: Neva Capital, Indaco Venture Partners, Invitalia Ventures, Noosphere Ventures Fund Representation: Board Director / Observer Type of Holding: Series A Preference Shares Valuation Method: Milestones achieved & comparables

Investment History Date

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size (€m) value (€m)

Apr 19

1.73

6.7

4.73

5.0

15.0

Oct 19

0.22

0.8

0.60

2.0

20.0

Feb 20

0.38

1.2

0.94

4.2

27.5

Apr 20

0.42

1.3

1.01

4.3

31.7

Total 2.75 10.0 7.28

Company Overview D-Orbit has capabilities in satellite manufacturing, launch deployment, satellite decommissioning, and related mission critical software. D-Orbit’s solutions cover the entire lifecycle of a space mission, including mission analysis and design, engineering, manufacturing, integration, testing, launch and deployment, and end-of-life decommissioning. The company’s core product focus is on its InOrbit Now (ION) satellite, a cubesat dispenser with propulsion that moves around space, allocating cubesats into different orbits and thus providing ‘last mile delivery’. The company’s long-term vision includes building orbit-to-orbit transportation, in orbit satellite servicing, and active debris removal.

Rationale for Investment The current launch rideshare paradigm is not fit for purpose for small satellite operators, and D-Orbit represents the next evolution of the rideshare market required for it to survive. If the Space Tech ecosystem is to deliver on its potential, the current challenges with launching smallsats must be addressed.

D-Orbit’s ION platform addresses the difficulties faced on both the supply side (large launchers) and demand side (smallsat constellations). It also provides the sophistication needed to deploy large, complex constellations that other approaches will struggle to match. D-Orbit’s ION technology and service differs from its competition by enabling more flexibility in different payloads and orbits that can be achieved, ability to switch launchers at a later stage through a wider network of launch suppliers, centralised mission control, as well as traditional packaged services like insurance. D-Orbit’s vision is to become the de facto launch aggregator for the entire industry, but there is also the opportunity to have customers subsidise the platform for other uses and continue to build towards the vision of being the in-space transportation / logistics company.

2019

2020

2021 Forecast

Revenue

3.0 2.2 11.2

EBIT

(2.3) (8.0)

(13.5)

Trading Update From Managing Partner James Bruegger D-Orbit successfully completed the second mission of its Ion ‘space taxi’ during the quarter. Importantly, this included validating both the propulsion systems and the advanced orbital manoeuvres these systems enable. This underpins the more advanced capabilities that the third mission – due to launch in June with SpaceX – will include. This third mission has sold out, with the company having now booked two further missions with SpaceX for later in the year.

As the only company to have demonstrated a fully functioning space taxi capable of doing both orbit raises and orbital plane changes, D-Orbit remains in pole position to capitalise on its first mover advantage in the in-space transportation market. Excitingly, the imminent third mission includes several hosted payloads that will demonstrate the potential value of Ion’s secondary mission – namely what it can be used for once it has delivered its cargo to their desired destination. The upcoming mission includes both edge computer and laser communications payloads that we anticipate will become valuable applications in their own right over forthcoming years as D-Orbit builds out its own pseudo constellation through the launching of more of its multi-purpose, multi mission Ion space taxis.

Post the end of the quarter, D-Orbit signed a term sheet for a potentially very substantial transaction. Due to confidentiality restrictions, we are not able to share further details of the transaction at this time but would hope to be in a position to do so in next quarter’s report.

James Bruegger

Exit Strategy Defence primes such as Boeing, Lockheed Martin, Northrop Grumman, Raytheon, Harris are possible potential acquirers, alongside their European counterparts. Other potential acquirers include large launch companies looking to add capability and coverage to their smallsat launch manifests.

17

Main Portfolio Update Trading Update From Managing Partner James Bruegger The sale of the business to Siemens was finalised in July 2020.

This resulted in £2.04m in proceeds being distributed to the Fund’s Limited Partners. A further £0.28m in additional proceeds is expected to be received in January 2022. This relates to a modest 18 month holdback that was agreed as part of the transaction with Siemens to cover any potential warranty claims or litigation. We have no reason to believe that the holdback will not be paid out in full.

UltraSoC Technologies Limited

Website: www.ultrasoc.com Sector / Sub-Sector: Build / Software & Engineering Stage: Realised – sold to Siemens in July 2020 Location: Cambridge, UK Fund’s Role: Follower Co-Investors: Octopus Ventures, Indaco Venture Partners, eCAPITAL

We will provide further updates in forthcoming quarters should there be any further developments regarding the pay out of the holdback.

Fund Representation: Board Observer Type of Holding: Series A Preference Shares, Convertible Loan Note Valuation Method: Terms of Completed Sale of the Business to Siemens

Investment History Date

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size (£m) value (£m)

May – Aug 19 1.02 Mar 20

0.31

Total1 1.33

5.0

1.70

5.0

12.0

N/A 0.62 3.0 N/A2 2

5.01 2.323

1

Totals subject to rounding

2

Loan notes treated on basis of 2x redemption premium paid out on sale of the business

3

Includes retained proceeds of £0.28m

Company Overview UltraSoC is a Cambridge-based silicon IP company selling what are essentially listening posts on systems-on-chips (SoCs), as well as the software that interprets and analyses the data. UltraSoC products put intelligent self-analytic capabilities in the SoCs at the heart of today’s consumer electronic, computing and communications products. The embedded analytics technology helps solve the most pressing problems faced by the high-tech industries today – including cybersecurity, functional safety, and the management of complexity. UltraSoC’s solutions also allow designers to develop SoCs more quickly and cost-effectively.

Rationale for Investment SoCs are the bedrock upon which virtually every new electronic device is built. The drive for automation has caused many more OEMs to integrate SoC’s in their products. But the increased complexity of these chips has made them easy targets for cyber-attacks and they are increasingly becoming ‘black boxes’ where it is very difficult to determine how the SoC is performing. As we move into an ever more connected world with ever greater automation, this issue has potentially far reaching implications such as inability to understand why an autonomous car may have crashed, why a satellite has ceased working, why a data centre is losing money or how a bank has been hacked.

UltraSoC’s technology is the only reliable way to see inside this black box to empirically determine whether it is operating reliably, safely and securely.

UltraSoC’s listening posts provide a potentially extremely valuable new data source offering intimate visibility of the real-world behaviour of entire systems. Such data will intuitively be tremendously valuable to a wide range of different stakeholders.

18

James Bruegger

Main Portfolio Update Financial Forecasts

Planet Watchers Ltd.

Y/E 31st Dec ($m) Revenue EBIT

Website: www.planetwatchers.com

2019

2020

2021 Forecast

- 0.13 1.0 (1.2) (1.4) (1.6)

Sector / Sub-Sector: Analyse / Satellites

Trading Update From Managing Partner Mark Boggett The company closed Q1 having won $330k of new business ($285k contracted SaaS revenue) with significant inroads into the crop insurance sector and secondary verticals such as agri-food. This is a significant step forward based on historical revenue performance and provides a strong platform for Q2.

Stage: Early revenues Location: UK, Israel, US Fund’s Role: Lead Co-Investors: Resolute Ventures, Amicus Capital, Tectonic Capital Fund Representation: Board Director & Observer Type of Holding: Series Seed 2 Preference Shares Valuation Method: Cost

Investment History Date

Jun 19

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size ($m) value ($m) 0.25

6.1

0.23

0.3

3.0

Sep 19-Jan 20 0.93

22.5

0.86

1.2

3.3

Jun 20-Nov 20 0.47

11.4

0.43

0.47

4.7

The pipeline looks strong with opportunities progressing with Agri-Sompo, GAIG and Nuterien - all of which have the potential to convert into sizable recurring revenues. PlanetWatchers is in the process of restructuring the sales team and outsourcing deal generation to scale operations.

Seraphim is co-leading the Pre Series A round alongside Creative Ventures.

Other investors are joining the over-subscribed syndicate including Trendlines (an agri-tech specialist investor), Ridgeline and Newable.

Total 1.65 40.0 1.52

Company Overview PlanetWatchers uses AI & ML to automate data capture from synthetic aperture radar SAR) and optical imagery, for large scale and all-weather natural resources monitoring. Combining multi-source satellite imagery with proprietary algorithms to detect patterns. Planet Watchers delivers a software solution for the crop insurance industry to reduce the claims process by months. It delivers results that are demonstrably more accurate, far faster and incredibly cost efficient at a global scale.

Mark Boggett

Rationale for Investment The earth observation (EO) analytics market is awash with start-ups capitalising on the availability of electro-optical satellite imagery where most employ a ‘consultancy’ business model, lacking scalability and largely undifferentiated. Furthermore, optical satellite imagery is only available during daylight and without cloud cover (c30% of the time), inhibiting persistent monitoring. Combining SAR imagery with optical imagery, enables a comprehensive and persistent view over areas of interest however difficult to process and requires long periods to generate insights from. Furthermore, SAR is a nascent field with very few experts. Planet Watchers is building one of the first scalable SAR and optical imaging analytics platforms for persistent monitoring and near real time change detection.

Exit Strategy As incumbent EO satellite operators look to expand their market share through delivering analytics. We believe Planet Watchers represents an attractive acquisition target for these businesses in the next few years. Our contacts at key data providers, including Airbus and DigitalGlobe, have all spoken highly of PlanetWatcher’s technical capabilities and unique approach to SAR analytics.

1

Totals subject to rounding

19

Main Portfolio Update AST & Science (now AST Spacemobile)

Website: www.ast-science.com Sector / Subsector: Data / Satellites - Telecoms Stage: Growth Location: US, UK

Trading Update From Managing Partner Mark Boggett The anticipated SPAC transaction concluded on 1 April, with AST & Science completing its merger with New Providence Acquisition Corp. The company is now listed on Nasdaq (ticker ASTS) and is fully funded to achieve phase one of its plan to launch an equatorial constellation creating the world’s first and only space-based cellular broadband network, providing access to 1.6 billion population in 49 initial countries.

Co-Investors: Vodafone, Samsung, Rakuten Mobile Fund Representation: Advisor Type of Holding: Options over common shares Valuation Method: Marketability Discount to pre-money IPO funding

Investment History Date

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size (£m) value (£m)

Dec-20 -

0.4 3.78 - -

Total 3.78

Company Overview AST is endeavoring to build the world’s first space-based cellular broadband network to be accessible by standard smart phones. AST’s new network seamlessly integrates with existing mobile networks without any human intervention, new hardware, or modifications to existing smart phones.

Mobile subscribers will be able to automatically roam from land networks to a space network no matter their location without the need to invest in expensive or specialised hardware.

Rationale for Investment AST has developed patented technology that creates “cell towers in space” that will connect directly to existing mobile handsets, seamlessly integrating with existing mobile networks without any human intervention or new hardware or modifications to existing smartphones / mobile phones.

The satcom market is today held back by the requirement for expensive antennas and bespoke expensive satellite phones. The holy grail is for satellite communication direct to a cell phone. No other company can deliver telephone and broadband from space to the cell phones everyone is already using. First mover advantage is huge, very high barrier of entry with protected intellectual property and global patents. It’s a potential $trillion market stretching far beyond phones, to cars, trains, planes, IoT devices, drones, sensors. AST has signed MOU’s with 7 leading network operators who collectively have a subscriber base of 1.3 billion connected users. Their $110m B series was led by Vodafone alongside Samsung, American Cell Tower and Rakuten.

AST has a visionary founder who has already built a $0.5bn company in the same industry, and who is following an execution plan that is very similar in terms of partnering with MNOs

20

AST SpaceMobile (new name) has unveiled plans to launch, in partnership with Vodafone, the first phase of its space-based mobile network in 2023 to transform coverage for countries in the equatorial region. The company also announced its 1,000th patent and patent pending claim in a testament to its commitment to innovation and discovery; and announced expanded appointments to its Board.

The company received $462m in gross proceeds from the transaction, consisting of New Providence’s approximately $232m cash in trust and approximately $230m from a PIPE investment, including investments from Rakuten, Vodafone, American Tower and UBS O’Connor. ASTS had no debt on its balance sheet at closing.

Mark Boggett

Main Portfolio Update Financial Forecasts

Edgybees

Y/E 31st Dec ($m)

Website: www.edgybees.com

2019

2020

2021 Forecast

Revenue

1.3 2.8 6.0

EBIT

(2.6) (2.0) (4.5)

Sector / Subsector: Analyse / Drones & UAV Stage: Early Revenue Location: Israel, UK, US Fund’s Role: Lead Co-Investors: 8VC, NFX, OurCrowd, Kodem Growth Partners, Verizon, Motorola, LG Fund Representation: Board Observer Type of Holding: Series A Preference Shares Valuation Method: Cost

Investment History Date

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size ($m) value ($m)

Aug 20 – Oct 20 1.54

5.0

1.46

Total 1.54

5.0 1.46

6.5

30.0

Company Overview

Edgybees is developing new capabilities for visual and situational awareness for use by commercial and government customers. Their technology utilises advanced machine learning algorithms, data analytics, and augmented reality to overlay data (i.e. points of interest, streets, utility lines, personnel location, alarms etc.) onto real-time video. As a sensor agnostic software solution, Edgybees technology is widely applicable to video feeds from satellites, drones, helicopters, and CCTV. Their platform fuses data to provide operators a ‘single pane of glass’ from which they can instantly visualise geospatial information, providing increased situational awareness and operational efficacy.

Trading Update From Managing Partner Mark Boggett The company made considerable progress during the quarter across many fronts. A key milestone was its first product release, on time, which was successfully field tested by three customers Leidos, Novetta, and Hood Tech. In addition, a further development licence was sold to BAE. The senior sales resources hired 6 months ago are already proving themselves capable of driving customers both into the pipeline and through their (typically year-long) internal processes. Engagements with General Dynamics, Boeing, BAE Systems, Palantir, Raytheon and Lockheed Martin are progressing well, with increasing evidence that Edgybees is providing a ‘must-have’ need for embedded Geo-Registration capability.

On the back of improving customer traction, the company has resumed delayed hires, including the VP Product, new QA Manager, Sales Executive and Additional Developers. However, the appointment of a US President is still on hold.

Seraphim has been playing an active role in helping to restructure the Board. At the time of writing, we are supporting management to completely overhaul the members of the Board to better align with the needs of the business.

Mark Boggett

Rationale for Investment The proliferation of sensors due to decreasing cost and size is creating a massive quantity of visual data globally and will continue to grow exponentially. There is a significant challenge in effectively processing, interpreting, and actioning the vast myriad of data collected in real time for mission critical operations. Operators simply lack the ability to achieve contextualised situational awareness from live video feeds while simultaneously interpreting relevant data from other disparate sources.

Edgybees augmented reality visualisation tools address a broadly unmet customer need and provides operators the spatial situational awareness from a central point. Edgybees technology differs from its competition because it is a more easily integrated SaaS platform that is sensor agnostic and does not require the integration of any additional hardware. What’s more, the architecture of its technology enables highly precise navigation in areas lacking a GPS signal, a desired attribute especially in military applications. As a result, Edgybees has a strong pipeline of current and near-term opportunities within the DoD and expected to catalyse for other allied militaries.

Exit Strategy Once Edgybees has validated accuracy and low latency of their augmentation engine, it is likely to become an attractive acquisition target.

The company may also look to explore the option listing publicly via SPAC or IPO once the company’s business is more proven out.

1

Totals subject to rounding

21 13

Main Portfolio Update Financial Forecasts

Isotropic Systems

Y/E 31st Dec (€m)

Website: www.isotropicsystems.com/ Sector / Sub-Sector: Downlink / Ground Terminals Stage: Early Revenue Location: UK Fund’s Role: Follow Co-Investors: SES, Boeing HorizonX, In-Q-Tel, Orbital Ventures, Space Capital Fund Representation: Board Observer Type of Holding: Series A Preference Shares Valuation Method: Cost

Investment History Date

Oct 20

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size (€m) value (€m) 1.54

Total 1.54

2.8

1.45

2.0

50.6

2.8 1.45

Company Overview Isotropic Systems is developing high performance flat panel antennas for the rapidly evolving satellite communications market. Their proprietary transformational optics radio frequency (RF) lens technology enables the world’s first high bandwidth and low power flat panel antenna, capable of connecting to multiple satellites simultaneously. Isotropic’s technology unlocks hybrid satellite communications networks where end users can seamlessly link to multiple satellite services for uninterrupted connectivity. The compact antenna design makes it an ideal solution for mobile applications in the ground transportation, aviation, and maritime markets.

Rationale for Investment The non-geosynchronous satellite communications market is poised to grow tremendously over the next five years with the likes of SpaceX, Amazon, OneWeb and several others, launching mega-constellations of satellites for ubiquitous connectivity. The ground equipment is still considered the major bottleneck to unlock the benefits of these LEO constellations and a multibilliondollar opportunity. Current terminals are expensive, bulky and lack the ability to track fast moving satellites across the sky nor particularly well suited for nonstationary applications. By virtue of our panoptic view of the space ecosystem and leveraging our information asymmetry, we were able to identify Isotropic as a best-in-class solution and poised to win significantly large high value market segments. Isotropic’s approach differs vastly from other antennas by utilising RF lenses which reduces the size and power consumption as well as enabling multiple connections to satellites from one terminal. The use of lenses also allows for differentiated capabilities such as anti-jamming and GPS denied navigation, which are of high value to their customers in the intelligence and defence markets.

Exit Strategy Satellite network operators looking to add to their mobile communications capabilities such as SES, Viasat, and Intelsat are possible acquirors. Other potential acquirors included defence primes such as Boeing, Lockheed Martin, Northrop Grumman, Raytheon, Harris are possible potential acquirers, alongside their European counterparts.

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2019

2020

2021 Forecast

Revenue

1.0 3.9 7.9

EBIT

(6.5) (7.1)

(19.1)

Trading Update From Managing Partner James Bruegger Despite being badly impacted by Covid, Isotropic nonetheless remains on track relative to the milestones identified at the point of initial investment. Covid impacted negatively on the company’s supply chain, with certain items being on longer lead times, and on the ability of the engineering team all to be on site at the company’s facilities at the same time. Most concerning, the founder CEO – John Finney – was hospitalised with Covid in January, although we are pleased to report that he made a swift and full recovery, having been absent for nearly a month.

As the totemic leader of the business, it was gravely concerning that John fell ill. However, it was testament to the calibre of the team he has built that continuity plans were swiftly implemented and the business continued to be well managed by the other members of the executive team whilst John was recovering.

Isotropic has now fully commissioned its new state-of-the-art engineering facility. This will be of great benefit to the company as it moves into a critical phase of technical development on its first-generation product. Both the lens and chip development of this product are on track and progressing well.

The next major milestone for the business is the planned trials in the US over the summer demonstrating Isotropic’s ability to connect simultaneously to multiple different satellites in different orbits from different operators. This has never been demonstrated before and this capability is central to the company’s vision for being able to connect to any satellite with the same antenna.

James Bruegger

Seed Portfolio Update Trading Update From Managing Partner Kit Hunter Gordon ArQit has continued its deep tech development and has now filed over 1,000 patent claims. The company has continued to make strong commercial progress and customers now include the UK Government, The European Space Agency, BT plc and Sumitomo Corporation with Verizon, BP, Northrop Grumman and Iridium currently testing its technologies. Its global addressable market is estimated to be c $194bn by the end of 2024.

ArQit Limited

Website: www.arqit.io Sector / Sub-Sector: Data / Satellites Stage: Seed Location: UK Fund’s Role: Follow Co- Investors: Notion Capital, Evolution Equity Capital Fund Representation: Board Seat / Observer Type of Holding: Convertible loan note Valuation Method: Marketability Discount to pre-money IPO funding

Investment History Date

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size (£m) value (£m)

Mar 18

0.25

4.4

22.80

1.0

4.0

Jun 19

0.38

0.8

4.51

3.5

37.9

Oct 20

0.25

0.3

1.38

8.5

90.0

Total 0.88 1

1

Totals subject to rounding

2

On an ‘as-converted basis’

5.5 28.69

During the quarter ArQit received a merger approach from a SPAC, Centricus Acquisition Corp. Following negotiations this led to the announcement of a merger on 12 May. On closing, a newly formed Cayman holding company, ArQit Quantum Inc, will merge with Centricus, acquire ArQit and register its shares for listing on Nasdaq. Closing, which is expected to be before the end of Q3, is subject to Centricus’ shareholder approvals and the satisfaction or waiver of the closing conditions in the Business Combination Agreement. The listed shares will be subject to lock-up provisions for the earlier of 18 months or until the shares trade above $12.50 per share for 20 trading days out of 30. If this condition is met within three years of closing a further 10 million shares (worth $100m at the $10 per share to be subscribed by PIPE investors) in ArQit Quantum Inc will be issued pro rata to the selling ArQit shareholders.

1,2

Company Overview ArQit is developing a satellite constellation for quantum key distribution to protect high-value communications from interception and decryption.

It is partnering with ESA to develop a satellite payload, control systems and ground control/receiving stations, to store and distribute quantum keys (essentially secret numbers used to encrypt communication) between end users. Customers then use these shared keys to encrypt communications that are sent over public communication channels.

ArQit’s proposed solution for secure communications fits existing infrastructure for valuable customers such as governments, network operators, and banks. The company is positioned to become the lead provider of secure communications for Europe, and potentially the entire Western world.

The transaction values the combined company at a pro forma enterprise value of approximately $1.0bn and is expected to provide up to $400m of gross proceeds to Arqit from a combination of $345m of cash held in Centricus’ trust account (assuming minimal redemption from Centricus existing shareholders), and approximately $70m from a fully committed PIPE. All existing shareholders and investors will continue to hold their equity ownership, and current Arqit shareholders will remain the majority owners of the combined company at closing.

In addition to financial investors, strategic investors Heritage Group, Virgin Orbit and Sumitomo Corporation have agreed to invest in the PIPE offering.

The investment is held at the valuation implied by the agreed merger following closing, less a 20% discount consistent with our two portfolio companies which have been subject to mergers with SPACs. Kit Hunter Gordon

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Seed Portfolio Update Trading Update From Portfolio Director Rob Desborough QuadSAT continued to make good progress through Q1 despite Covid meaning the company could only make virtual customer demonstrations.

QuadSAT ApS

Website: www.quadsat.com

Commercially, a strong pipeline is now being built across Satcoms, Radar, Defence and 5G. The focus has been on the KU Band and X Band product in Satcoms with pilot customers. The KA Band product is currently at protype stage and should be coming on stream later in the year. Initial product sales have been identified with Weibel, Cobham, Aalborg Uni and EM Solutions.

All represent highly referenceable customers, with notable ones being Weible, considered as the ‘Rolls Royce’ of the radar market with over 4,000 European defence sector installations needing daily testing, and leading antenna company Cobham. With the final technical development, we anticipate a commercial launch in June of the first product.

Sector / Sub-Sector: Downlink / Communications Stage: Seed Location: Denmark, UK (Harwell) Fund’s Role: Follower Co-Investors: Angels, Vækstfonden (Danish Growth Fund) Fund Representation: Board Observer Type of Holding: Series Seed Preference Shares Valuation Method: Cost plus converted loan note interest

Investment History Date

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size (£m) value (£m)

Dec 18

0.30

5.4

0.40

0.73

2.4

Jul 20

0.69

8.7

0.64

1.79

4.9

In addition to the focus on ‘Product’ sales, QuadSAT continues to build a pipeline of indirect service sales through referrals from the larger satellite operators. These operators require the antenna manufacturers to test their antenna before accessing their networks.

Total 0.99 14.1 1.04 1

Totals subject to rounding

Company Overview QuadSAT has the potential to radically change the Satellite Communication industry with a unique drone platform. It has developed a drone-based tool and technique for testing and calibration of satellite and VSAT antennas, which connect with satellites. This technology solves critical industry issues in a rapidly growing market where quality is critical, and interference can be significant. Initially it is focusing on the high-value Maritime and Aeronautical mobile sat comms markets. The drone mimics an orbiting satellite, while simulating vehicle (ships/planes) motion. The technology reduces vessel and aircraft downtime for testing procedures, significantly reducing operational expenses as well as allowing more uptime on networks.

The highlight of the quarter was the first sale of a service package to one of the mega constellation companies providing broadband connectivity.

QuadSAT is now scheduled to test one of its ground stations in June onsite.

Subject to a successful outcome, the customer has a further 40 ground stations globally. In addition, the company is receiving strong inbounds from other LEO mega constellations. The engagement with ESA also continues, following the successful demonstration of capabilities to the ESOC (European Space Operations Centre) mission command for all ESA’s space activity. There are several high profile opportunities now being discussed as ESA evaluate the system.

Following the appointment of Torben Frigaard Rasmussen as the new Chair and Carlo Rizzo as Chief Commercial Officer early in Q1, we are starting to see the commercial impact they will bring. Their involvement is addressing some of the business development and sales areas which are critical as the company executes on its Go to Market plan. Importantly, they have freed up the CEO from the technical sales process.

The company’s cash position remains strong through to the end of the year and that should be bolstered through anticipated sales and further ESA funding of over €500,000. With the rapid growth of the satellite market, managed RF spectrum will become critical and once the company ships its first products to market in Q2, we anticipate it will be in strong position for its Series A round scheduled for late 2021.

Rob Desborough

24

Seed Portfolio Update Trading Update From Portfolio Director Rob Desborough Xona is performing well and on track with its development milestones. The internal payload development has now passed the PDR (Preliminary Development Review), satisfying the operational and suitability requirements of the system performance specifications. Following this, the company has submitted additional patents protecting the novel antenna design and constellation architecture.

With the PDR complete, a contract has now been signed with a launch provider and progress is being made towards an anticipated initial launch in March 2022.

Xona Space Systems

Website: www.xonaspace.com Sector / Sub-Sector: Data / Satellites Stage: Seed Location: US, UK Fund’s Role: Follower Co-Investors: 1517 Fund, Trucks Venture Capital, Stellar Solutions Fund Representation: Board Observer Type of Holding: Series Seed Preference Shares Valuation Method: Cost

Investment History Date

Mar 20

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size (£m) value (£m) 0.26

Total 0.26

5.0

0.22

1.0

5.0

5.0 0.22

Company Overview Xona Space has the potential to be the pioneering enabler for the adoption of connected and autonomous technologies. GPS (Global Positioning System) is the ubiquitous technology the world uses where PNT (Position, Navigation, Timing) is needed. From electrical power grids, communications infrastructure and mobile devices, all modes of transportation, precision agriculture, weather forecasting, emergency response and defence- GPS is a critical infrastructure.

Current GPS (GNSS) systems cannot provide the accuracy, security and availability of service required to keep pace with new technologies like connected and autonomous technologies. Xona Space has established a world class team to address this problem and opportunity by building the first high precision GPS small satellite constellation in low earth orbit.

The company is now completing the logistics with the Mayflower Autonomous Ship (MAS) programme in Plymouth MA, USA to demonstrate its innovative global navigation system for transportation applications operating in GNSS-denied environments. In the period Xona has also won a further $100,000 grant from the NGA (National Geospatial Intelligence Agency) and joined its accelerator. This has been incredibly valuable as NGA operates much of the GPS network, providing valuable inside connections and views into this world. The company has also won a $240,000 US Navy SBIR grant.

On the regulatory side, the preliminary signal interface control document (ICD), a key milestone in spectrum licencing, is now with a select group of receiver companies for their feedback and to discuss prototype receiver development. In collaboration with one of the receiver companies, a way has been found to make Xona’s service backwards-compatible with the majority of existing DoD and infrastructure receivers, opening a very large new market opportunity. Term sheets are now expected for a $8m Pre Series A round this summer, which would take the company through to the launch of two demonstration satellites.

Rob Desborough

23 25

Seed Portfolio Update Nu Quantum

Website: www.nu-quantum.com Sector / Sub-Sector: Downlink / Security & Storage Stage: Seed Location: Cambridge, UK Fund’s Role: Follower Co-Investors: Amadeus Capital Partners, IQ Capital, Ahren Innovation Capital Fund Representation: Board Observer

Trading Update From Portfolio Director Rob Desborough Nu Quantum is progressing well against its technology development roadmap, achieving some significant milestones with its Quantum Random Number Generator (QRNG).

The team grew from 6 FTE in December to 12 FTE in April as it matures and decouples Engineering (product delivery) from Scientific Research (cutting-edge IP generation + exploitation). Engineering is focused on the delivery of three working prototype modules for detector, source and QRNG technologies. Research is focused on significant increases in device performance through IP exploitation. The company anticipates increasing the QRNG performance by a factor of four.

Type of Holding: Common shares Valuation Method: Cost

Investment History Date

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size ($m) value ($m)

Sept-20 0.10

1.0

0.1 0.2 6.5

Total 0.10

1.0 0.1

Company Overview Nu Quantum is a Quantum Photonics spinout from Cambridge University, based on 8 years of research at the Cavendish Laboratory. Nu Quantum unlocks the power of quantum secure communication with its singlephoton components enabling commercially viable photonic quantum technologies. As we move towards ‘free space’ communications and the power of Quantum processing comes nearer today, encryption methods rapidly become unsecure.

The essential ingredient in any quantum photonics information processing system are single photons. Generation and detection of single-photons establishes a strict upper-limit in a system’s speed, rate and efficiency. The Nu Quantum system has the potential to transform the transmission of large volumes of quantum-secure data at high rates. Currently, devices that generate and detect single photons require complex cooling systems and are costly. Nu Quantum delivers a solution to these challenges with novel, high-performance, room temperature single-photon components.

26

By the end of the year, Nu Quantum should have created and delivered three cutting-edge quantum photonics products from three unique inventions in less than one year. The current Innovate UK (IUK) projects are progressing to plan and they have been awarded a new IUK project around Single Photon sensing. The business has also applied for Quantum Computing, a very significant opportunity for Nu Quantum. Commercially, QRNG customer responses are currently slow, but there is good validation of the opportunity within defence for the detector and particularly within Linear Optical Quantum Computing (LOQC) for both source and detector.

Within the Quantum Computing environment, having source and detector technology that can operate at room temperature is seen as ‘gamechanging’ and ‘transformational’ by some of the organisations in this field.

Finally, the Board is pulling together a roadmap towards the next funding round.

Rob Desborough

Seed Portfolio Update Opteran

Website: www.opteran.com Sector / Sub-Sector: Build / Software & Engineering Stage: Seed Location: UK

Trading Update From Portfolio Director Rob Desborough Opteran is performing well and progress is in line with plan. During the quarter, the company completed its initial recruitment plans and advanced against its technology and commercial roadmap. Over the period the business continued to test thinking on its strategy and commercial model, as more is learned about the specific needs of customers and as it looks to secure first mover advantage in Natural Intelligence based autonomy.

Fund’s Role: Follower Co-Investors: IQ Capital, Episode 1, Join Capital Fund Representation: Information rights Type of Holding: Seed Series Preference Shares Valuation Method: Cost

Investment History Date

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size ($m) value ($m)

Nov-20 0.3

3.6 0.3 1.7 5.1

Total 0.3

3.6 0.3

Company Overview Opteran is a spin-out from the University of Sheffield, developing integrated chips for cutting-edge computer vision and decisioning capabilities in autonomous systems. The company’s technology leverages advancements in neuromorphic computing where their novel approach to emulating neural pathways of honeybees on silicon chips enables ultra-low power and highly accurate computer vision and decisioning.

There is now a strong pipeline of 70 opportunities across key industries and first development kits are in the market. GMV is assessing the technology across security, agritech and the nuclear robotic domain. In addition, Opteran has a further three test kits in market with multinational customers in Aerospace, Defence and Oil and Gas, scoping Proof of Concept projects.

The current technology is being used for “See and Sense” demonstrations with the roadmap moving towards SLAM (Simultaneous localization and mapping) capabilities later this year, a significant milestone prior to a Series A round scheduled for H1 2022.

The period has also seen some significant PR opportunities. Opteran is one of five finalists at Vision Tank 2021. The competition showcases the best new ventures that are solving real-world problems by creating innovations fuelled by visual AI, deep learning and computer vision. Finally, James Marshall (the CSO) featured in New Scientist Magazine with his article “Insect brains will teach us how to make truly intelligent robots”.

Rob Desborough

Opteran’s technology is widely applicable to any autonomous system requiring computer vision and has a great deal of potential for applications within space, mining, warehousing, and consumer robotics. The company is currently working with a pilot customer on a mining robotics solution and recently delivered its first-generation FPGA development kits which has generated substantial interest.

27 23

Seed Portfolio Update SatelliteVu

Website: www.satellitevu.com/ Sector / Sub-Sector: Data / Satellites Stage: Seed Location: UK Fund’s Role: Lead Co-Investors: AO Proptech, Ridgeline Ventures, E2MC, Stellar Solutions, Earth Sciences Foundation Fund Representation: Board Director Type of Holding: Seed Series Preference Shares Valuation Method: Cost

Investment History Date

Fund investment Fund Fair Deal Pre-money amount (£m) holding (%) value (£m) size (£m) value (£m)

Dec-20 – Feb 21 0.5

15.2

0.5

1.0

2.7

Total 0.5 15.2 0.5

Company Overview SatelliteVu is developing the world’s first constellation of mid-wave infrared small satellites for high resolution and frequent revisit thermal imaging, capable of seeing into buildings.

SatelliteVu will be able to take pictures and video of thermal footprints anywhere in the world every 1-3 hours and at a high resolution of 3.5m.

From their proprietary thermal imagery, the team is building machine learning analytics enabling new applications to address challenges at a global scale in a variety of fields including climate change.

28

Trading Update From Managing Partner James Bruegger In the short time since we closed our initial investment in SatelliteVu, momentum has been positive. The balance of the seed round led by Seraphim was four times over-subscribed. This led to the business ultimately raising an additional £1m via a convertible loan note, in which Seraphim also participated. The business now has a fantastic roster of investors including several specialist Space Tech investors, a large evergreen property-focused fund and a US-based fund that specialises in supporting early stage companies win initial contracts with the US Department of Defense – by far the biggest potential customer for a business such as SatelliteVu. Such has been the extent of investor interest in the business, it is now gearing up for another round of funding over the summer which will be required to match-fund the next tranche of anticipated grant funding from the UK Space Agency. With existing funding already allocated to the build of the infrared sensor for the first satellite, this next phase of funding will be for the manufacture and launch of the first satellite.

The business has also made positive progress in a number of other areas, including making several critical technical hires, undertaking several additional aerial test flights and beginning to develop the analytics tool chain for extracting insight from its infrared imagery.

James Bruegger

Appendices Cash Flow Schedule – Drawdowns (£m) Period

Y1: (28/10/16 – 30/09/17)

(2.67) - (2.56) - (5.23) -

Y2: (01/10/17 – 30/09/18)

(5.01) - (4.51) - (9.52) -

Y3: (01/10/18 – 30/09/19)

(6.98) - (4.14) - (11.12) -

Y4: (01/10/19 – 30/06/20)

(6.38) 1.61 (3.71) 0.43 (10.09)

Y5: (01/10/20 - 31/12/20)

(1.98)

Total To Date1 1

British Business Bank Other Fund Investors Total Fund (All Investors) Drawdowns Distributions Drawdowns Distributions Drawdowns Distributions

- (1.07) -

(23.01)

(2.04)

(3.05) -

1.61 (15.98) 0.43 (39.00) (2.04)

Totals subject to rounding

The table above details the cash flow of the Fund, split between funds drawn down and proceeds distributed back to investors. The table splits out this cashflow between the British Business Bank (the Fund’s cornerstone investor) and all other Fund Investors. Please note the quarterly and total figures are rounded.

Fees & Carried Interest The tables below are designed to provide investors with a view as to how the General Partner / Management Company of the Fund is remunerated, comprising of the following elements:

Fees Received (Year to Date) (£m)

01/01/21 – 31/12/2021

Monitoring Fees

0.01

Arrangement Fees

-

Other Fees

-

Total Fees Received

0.01

General Partner Share (Management Fee)

(£m)

Y1 (28/10/16 – 30/09/17)

0.83

Y2 (01/10/17 – 30/09/18)

1.33

Y3 (01/10/18 – 30/09/19)

1.19

Y4 (01/10/19 – 31/03/20)

1.17

Y5 (01/10/20 - 31/03/21)

Fees Received – Income received from portfolio companies in the form of portfolio monitoring fees, transaction arrangement fees, and any other fees. As per Clause 6.20 of the Fund’s Limited Partnership Agreement, any such fees received by the Management Company result in a commensurate reduction for the period in question in the Management Fee charged to investors by the Management Company.

General Partner Share – This is the Management Fee paid by the Fund’s investors to the Management Company. During the Initial Investment Period (namely the first five years of the Fund’s operation) this is calculated on the basis of 1.8% per annum of the total commitments to the fund (which currently stand at £66.80m), less any other fees received.

0.58

Total Cumulative Management Fees To Date 5.11 1

Carried Interest

1

Carried Interest Paid to Date

-

Current Period Carried Interest Paid

-

Current Period Carried Interest Earned

-

Current Period Carried Interest Accrued

5.84

Carried Interest – This is a share of profits paid by the Fund to the Management Company. Carried Interest is not payable until such a time as the Fund’s private investors have achieved a return equivalent to 8% compounded annually on funds drawn down.

Totals subject to rounding

29

167 City Road | London | EC1V 1AW T +44 (0)203 674 2805 | E info@seraphim.vc

www.seraphim.vc

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