intuitive machines im-1

Intuitive Machines' second moon mission on track for 2024

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intuitive machines im-1

Image Credits: SpaceX (opens in a new window)

Intuitive Machines’ second moon mission is still on track to launch before the end of this year, after the company only had to make minor adjustments to the lunar lander design, executives said during an earnings call Thursday.

The company made history earlier this year when it became the first commercial company to land a spacecraft on the lunar surface. That mission, called IM-1, was not without its quirks — the lander ultimately came in a little too hot and ended up tipped over on the surface — but it proved out the lander’s core components, engine, and subsystems.

That same lander class, which the company calls Nova-C, will be returning to the moon later this year in that second mission. Critically, the IM-2 mission will deliver NASA payloads that will search the lunar South Pole for water ice, a resource that could eventually be processed into propulsion for rockets or to support a permanent lunar astronaut habitat.

The Intuitive Machines team identified just “a handful of adjustments” that will be implemented on the second lander, CEO Steve Altemus said during the earnings call.

“We really don’t see any impacts to the schedule based on the changes from IM-1,” he said. “They are fairly straightforward.”

Among the changes that the company will be implementing are improvements to the laser rangefinder switch system, he added. The laser rangefinders are a navigational subsystem on the lander, and they help determine variables like altitude and horizontal velocity. Mission controllers learned very late in the game that the laser rangefinders on the first lander were not functional — because engineers did not turn on a physical switch on the component while it was still on the ground. (They managed to land the spacecraft anyway through some very quick thinking.)

The second mission may be impacted because NASA is still finalizing the landing site, which will be somewhere on the lunar south pole on a ridge near the Shackleton crater. When the space agency originally announced the landing site location for the IM-2 mission, they noted that data from the Lunar Orbiter spacecraft indicated that the area could have ice below the surface.

Intuitive Machines ended the fourth quarter of 2023 with $30.6 million in revenue and a cash balance of just $4.5 million. That number was given a significant boost after an intuitional investor exercised $50.6 million in warrants and the company closed a $10 million strategic equity investment.

As a result of these investments, as of March 1, the company’s cash balance swelled to nearly $55 million — the largest balance “relative to any quarter-end” since the company went public in February 2023.

Beyond the second moon mission, 2024 will likely be a pivotal year for the company, which is awaiting the decision on NASA awards that could be extremely lucrative. That includes the award for the Lunar Terrain Vehicle, which NASA will announce early next month, and the next lunar lander contract under the agency’s Commercial Lunar Payload Services program.

Seraphim Space team

Seraphim Space launches second VC fund with 9 investments already under its belt

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Seraphim Space team

Image Credits: Jack Ladenburg

Seraphim Space, the U.K.-based space tech investment group, is formally launching its second VC fund following its first close with limited partners, including Eutelsat, TechCrunch learned exclusively. The early-stage fund will build a global portfolio of 30 startups that will be backed at the seed and Series A stages.

CEO and manager Mark Boggett declined to disclose the percentage reached and fund’s targeted size but said it should be larger than Seraphim Space’s 2017 £70 million VC fund (around $95 million at the time).

Like its predecessor, Seraphim’s second VC fund, SSV II, is backed by major players from the aerospace sector looking to keep up with innovation.

This time around, Seraphim will also be operating in a busier and more competitive market.

Investors have become increasingly aware of space startups and the broader market, which could be worth $1.8 trillion by 2035, up from $630 billion in 2023, according to a recent report by the World Economic Forum and McKinsey. The number of funds willing to invest in space tech has increased compared to 2017, including both generalists and specialists such as Space Capital, SpaceFund, Starbridge Venture Capital and Starburst Aerospace.

Seraphim Space hopes to stand out with its track record. Its first fund returned three times the original investment, which helped dispel the cliché that space investment is “super high risk and super long term,” Boggett said.

Returns from its last fund were partly fueled by five exits — the trade sale of chip company UltraSoC to Siemens and four IPOs: Arqit, AST SpaceMobile, Nightingale and Spire Global.

Satellite constellation operator Spire Global to go public via $1.6 billion SPAC

However, today’s public market is a different world compared to 2021, especially for tech listings. This affects both Seraphim Space’s portfolio companies that went public and the investment group itself.

The firm’s growth fund Seraphim Space Investment Trust (SSIT) listed on the London Stock Exchange in July 2021 with £250 million in gross proceeds (some $300 million at the time). After an all-time low in July 2023, its market cap is now £130 million, or $162 million, despite the fact that SSIT’s largest holding, ICEYE, became EBITDA profitable last year.

These market conditions forced the cash-strapped SSIT to focus on follow-on investments rather than new deals and suggested that getting funding through the LSE for early-stage, non-profitable bets would be even harder.

“With VC funds, we’re able to make mistakes and have failures and high levels of risk over a longer period of time than the public market is comfortable with,” Boggett told TechCrunch. And while it didn’t help that SSIT was trading at a markdown, its existence has been helpful in other ways.

Through an approach known as a warehouse arrangement, SSIT funded the nine investments that SSV II already made before its first close. This helped show prospective limited partners that its investment thesis goes beyond what space is usually conflated with — launching rockets and satellites.

Wide space

The market growth anticipated by the World Economic Forum reflects that space tech has applications in other industries.

“All of the big trends that are underway are really being enhanced by space,” Boggett said, likening it to AI in the sense that “it’s really an enhancing capability, a facilitating capability for every other sector.”

The application of AI to space data is one of the main themes SSV II will invest in. In fact, it already has done so by backing insurtech startup Delos and carbon credit verification platform Renoster. Both companies use large troves of data and modeling to address issues related to climate change.

Seraphim Space’s enthusiasm for companies like Delos is twofold: The tech could have a real impact beyond monitoring, and they have the potential for high valuations (and returns).

“They’re addressing some of the biggest problems that we are faced with.”

The fund’s third area of focus will be in-orbit computing. It sounds a bit more abstract, but also has the potential to have an impact on sectors such as agriculture and infrastructure. For instance, this category includes Aethero, a company that develops edge computers that would eventually support autonomous decision-making on orbit.

SSV II is also targeting space-enabled communications, with one portfolio company so far: Hubble Network, which wants to connect a billion devices through a space-based Bluetooth network. Its CEO, Alex Haro, knows a thing or two about locators: He previously co-founded Life360, which acquired Tile in 2021.

Hubble Network wants to connect a billion devices with space-based Bluetooth network

SSV II’s fourth theme, microgravity for science, reminded us of a company outside of its portfolio: Varda Space Industries, which is making orbital drug manufacturing a reality and raised a $90 million Series B round a few weeks after its first capsule returned from orbit. Biopharma aside, other applications include research around new materials, Boggett said.

Defense isn’t highlighted as an investment theme, despite its recent tailwinds among funds, but Boggett acknowledged its ubiquity in space tech.

“The vast majority of space companies are dual-use companies,” he said. But, he quickly added, “the bigger market opportunity is in the commercial market as they move into the broader underlying sectors.”

This story has been updated to correct that Airbus didn’t participate in the first close; Eutelsat did.

TLcom Capital

TLcom Capital closes second fund at $154M to back early-stage startups across Africa

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TLcom Capital

Image Credits: TLcom Capital

Venture capital activity in Africa has shown resilience over the past six months, with major firms on the continent closing their funds despite the ongoing funding winter.

In the latest development, TLcom Capital, an African VC firm with offices in Lagos and Nairobi and a focus on early-stage startups, has concluded fundraising for its second fund, TIDE Africa Fund II, totaling $154 million. The final close positions the firm as Africa’s largest investor across seed and Series A, the firm said.

The oversubscribed fund, initially targeted to close at $150 million, attracted participation from over 20 limited partners, TLcom said. Notable investors include the European Investment Bank (EIB), Visa Foundation, Bertelsmann, and AfricaGrow, a joint venture between Allianz and DEG Impact.

The final close comes two years and a few months after TLcom announced the first close of the second fund at $70 million, when it matched the size of its first fund, TIDE Africa Fund I. While the broader slowdown affecting venture capital and startups globally contributed to the prolonged fundraising period, the VC firm can count a few positives, managing partner Maurizio Caio told TechCrunch in an interview.

TLcom Capital targets $150M for its second fund to invest in 20 African startups

Notably, TLcom closed the second fund in a shorter timeframe than its preceding fund despite being twice its size, Caio said. He attributed this to an improved understanding and acceptance of venture capital in Africa among limited partners as a legitimate asset class. Additionally, a portfolio of companies that exemplified the firm’s investment strategy played a pivotal role in garnering investor confidence and support, he added.

Unlike many VC firms that progress from backing startups in pre-seed and seed stages to later-stage investments with subsequent funds, Caio said, TLcom maintains a consistent strategy. The firm, which focuses on traditional sectors like fintech, mobility, agriculture, healthcare, education, and commerce, prioritizes early-stage opportunities, particularly at the seed and Series A stages, while also considering opportunistic deals at growth and later stages. For example, the investor backed 10 out of the 11 companies from its first fund at the seed or Series A stages and has deployed capital in follow-on rounds at later stages across both funds (a Series C investment in Andela, a unicorn provider of global job placement for software developers, and partaking in a Series B extension round in FairMoney, a Nigerian digital bank), he said.

“We like to start early when the entrepreneur is raising seed or Series A and then to be with the entrepreneur along the journey and continue to invest if we think that the company deserves more capital,” Caio said. “We build our portfolio such that we back 20 to 25 companies. So if everything works out, we can return the fund individually.”

Caio said when TLcom evaluates early-stage opportunities, it assesses the potential of companies to generate 10x to 20x returns. The approach, he says, is to ensure that successful companies compensate for losses and allow the firm to achieve 3x to 4x returns on an aggregate basis.

One way Caio said the firm is improving its risk in this regard is by backing repeat founders: Sim Shagaya (of uLesson and Konga), Etop Ikpe (Autochek and Cars45), and Grant Brooke (Shara and Twiga) come to mind. Despite their past ventures not achieving desired outcomes, Caio says these founders gained insights that will help them avoid repeating past mistakes and make better decisions in their new ventures. “When things don’t go as planned, it’s important to act swiftly, pivot, and move on to the next venture, knowing that lessons learned will pave the way for future success,” he said.

Another is by investing earlier in deals. In 2020, TLcom invested in Autochek and Okra at the pre-seed stage and has since followed up in subsequent rounds. Two years later, the firm launched a pre-seed strategy in which it set aside $5 million to be disbursed in small check sizes with a low-touch approach, creating a pipeline to its primary strategy at seed and Series A (upskilling platform Talstack is its first recipient). A portion of this fund, $2 million, was also dedicated to co-investing in women-led startups through FirstCheck Africa, a women-focused pre-seed fund. The firm says its commitment to gender balance is evident in its majority-female partnership and investment committee, where three out of five partners are women.

TLcom Capital appoints Eloho Omame as partner to back more pre-seed and female-led startups

TLcom has already backed six companies from its new fund, with initial investments ranging from $1 million to $3 million. They include SeamlessHR, FairMoney, Zone, and Vendease. Additionally, the firm has invested in ILLA, a middle-mile logistics platform, and Littlefish, which enable payments and banking products for SMEs, marking its first investments in Egypt and South Africa, respectively.

“For us, the Big Four markets always continue to produce the most valuable companies, so it was important to add Egypt and South Africa as destinations of our capital,” said Caio, noting that TLcom’s portfolio before now has primarily had startups based out of Nigeria and Kenya, where the firm has since expanded its operational capacity and expertise.

Other notable venture capital firms like Norrsken22, Al Mada, Algebra Ventures and Partech Africa have also raised significant funds to back African startups from pre-seed to Series C. However, as these funds are deployed across various stages of startup growth, attention will turn to the exit opportunities they facilitate and the tangible returns they deliver to their LPs, as these outcomes play a crucial role in driving the overall growth of the African tech ecosystem.

“Africa shouldn’t just be about how much money is going in, but also about returns,” Caio said. “We need global capital to look at Africa and think of a place where good investments can be made and technology can generate much value. That’s still to be achieved at scale, so that’s our primary target.”