SuRo Capital: Unlocking Access To Potentially High-Growth Venture Opportunities Like OpenAI And Liquid Death

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By James Blacker, Benzinga

SuRo Capital Corp (NASDAQ: SSSS), a publicly-traded investment fund founded in 2011, has provided everyday individual investors with access to high-growth, venture-backed companies for over a decade. While venture capital has historically been typically limited to large or institutional investors, SuRo Capital provides exposure to these highly sought-after pre-IPO opportunities to the public.

Other options to invest in venture capital are currently limited; complex investment platforms like Fundrise can be difficult to navigate, while other venture-focused platforms often have high barriers to entry. Instead, investors can simply purchase shares of SuRo Capital to gain exposure to a portfolio of potentially lucrative emerging companies.

Portfolio Highlights

SuRo Capital aims to spot potential early, focusing on late-stage, high-growth private companies that are potentially poised for rapid expansion. Holdings cover a range of sectors and include names like artificial intelligence (AI) developer OpenAI, graphic design software platform Canva, AI hyperscaler CoreWeave and fast-growing beverage brand Liquid Death.

Throughout its history, SuRo Capital reports that it has carried out successful exits from some of the biggest companies in the world, notably achieving a 6.9x return on its investment in Palantir (NYSE: PLTR) from 2012-2021 and a 6.6x return on its Coursera (NYSE: COUR) investment over a similar period. Other successful exits include Spotify (NYSE: SPOT), which returned 3.4x over a four-year period, and Lyft (NASDAQ: LYFT), which grew 2.8x during SuRo’s investment from 2014 to 2019.

More of SuRo Capital’s select investments and exits can be seen here.

Q3 Update: $55 Million In AI Investments

In an Oct. 10 press release, SuRo Capital provided an update on its investment portfolio for the third quarter of 2024, noting it was one of the most active investment periods in the last decade.

The quarter saw SuRo Capital make a $17.5 million investment in OpenAI, the AI research firm primarily known for developing advanced AI models GPT and DALL-E. SuRo also increased its position in AI cloud computing provider CoreWeave through a $5 million secondary transaction.

Following the end of the quarter through Oct. 10, the company also invested $12 million in VAST Data, an AI infrastructure data platform focused on providing enhanced productivity and simple data management, as well as an additional $5 million secondary investment in CoreWeave.

“With these new investments and our existing investment in CW Opportunity 2 LP we have invested nearly $55 million into some of the leading AI infrastructure companies. Given AI’s significant addressable market, we believe dedicating a significant portion of our portfolio to AI infrastructure will prove to be successful for our shareholders,” said SuRo Capital chairperson and chief executive officer Mark Klein.

As of Sept. 30, SuRo Capital’s portfolio included positions in 36 different companies. The company’s net asset value is estimated at between $6.50 to $7.00 per share, down from $8.41 per share in Sept. 2023.

A Potentially Promising IPO Landscape

A resurgence in IPO activity in 2024 driven by the tech sector could provide ample exit opportunities for SuRo Capital, particularly with analysts anticipating even more offerings in 2025. Notably, Reddit (NYSE: RDDT) went public earlier this year, rising 48% on its debut. As IPOs gain momentum, SuRo Capital's pre-IPO investments could unlock significant value, offering its shareholders the potential for substantial returns as more companies in its portfolio potentially go public.

Featured photo by Scott Graham on Unsplash.

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