Let me paint a picture for you.
The Spaceship team sits in a nice open-plan office in the Sydney CBD. We’re surrounded by office buildings and buskers and light-rail construction. There are snacks on the kitchen counter, Cokes and beers in the fridge, and Spotify playlists on rotation.
On one side of the office sits our three-person investment team.
Every quarter, they look at their collective research from the past few months; the fundamentals of each business in the Spaceship Universe Portfolio, whether they continue to have sustainable competitive advantages (aka moats) and therefore still meet our Where the World is Going criteria. Then, they partake in what we like to think of as a type of investing wizardry. Their mission is singular: to revisit the companies in the Spaceship Universe Portfolio.
For this quarter, mission: complete.
We’re adding two companies to the Spaceship Universe Portfolio: Sea and Next Science.
So, let’s take a closer look.
Sea is a Southeast Asian company involved in two industries: shopping and online gaming.
Garena is its online gaming arm. It uses the “freemium” model, which means users can play its games for free, while the business generates revenue from selling in-game virtual items. Through Garena, Sea has an agreement with Tencent, which gives Garena first right of refusal to distribute Tencent’s mobile and PC games in Southeast Asia. It will launch Call of Duty on mobile in Southeast Asia.
Shopee is its e-commerce arm. The site makes shopping easier for sellers and buyers in Southeast Asia. Sea is also exploring payments with its Airpay App platform.
Why we like it:
Sea is in two competitive industries, that’s true. But we think it’s well-placed to diversify and create spin-offs, as it is already doing with Airpay App.
BUY: Next Science
Next Science is a scientific research-and-development company.
It creates and brings to market treatment methods that are used to address the leading cause of antimicrobial resistance: bacteria biofilms.
Put simply, biofilm is a collection of one or more types of microorganisms that can grow on different surfaces; microorganisms that form biofilms include bacteria and fungi.
Put even more simply, biofilm has the ability to cause infection.
Next Science’s products break down the biofilm, with the aim of minimising the risk of infection arising from medical interventions.
Why we like it:
According to Next Science, biofilm-associated infection impacts 17 million people, every year, in the US alone — at an estimated annual direct cost of US$94 billion.
If Next Science’s patented Xbio technology is able to target antimicrobial resistance and therefore reduce the overall use of antibiotics, that would be pretty impressive, and that’s why we’re interested in seeing where Next Science is heading.