Overview

SuRo Capital Corp. is an internally managed, non-diversified closed-end management investment company that has elected to be regulated as a Business Development Company (BDC) under the Investment Company Act of 1940. The company’s investment objective is to maximize its portfolio’s total return, primarily by seeking capital gains on its equity and equity-related investments, and to a lesser extent, income from debt investments.

SuRo Capital invests principally in the equity securities of rapidly growing venture capital-backed emerging companies across several key industry themes, including Software-as-a-Service, Artificial Intelligence, Consumer Goods & Services, Education Technology, Logistics & Supply Chain, Financial Technology, and Sports. The company acquires its investments through direct investments, secondary marketplaces, negotiations with selling stockholders, and investments in SPVs and investment funds.

Portfolio and Investment Activity

In 2024, SuRo Capital funded $74.5 million in new investments, including companies like Supplying Demand Inc. (Liquid Death), Canva, and CoreWeave. The company also exited or received proceeds from investments totaling $26.1 million, realizing a net loss of $5.0 million. Notable exits included positions in Nextdoor Holdings, PSQ Holdings (PublicSquare), and Oklo.

In 2023, SuRo Capital funded $25.8 million in new investments, including Orchard Technologies, True Global Ventures, and ServiceTitan. The company exited or received $17.3 million from investments, realizing a net loss of $11.9 million. Key exits were from Kahoot!, NewLake Capital Partners, and Nextdoor Holdings.

Results of Operations

SuRo Capital’s total investment income decreased from $6.6 million in 2023 to $4.7 million in 2024, primarily due to lower interest and dividend income. Total operating expenses also decreased from $20.0 million in 2023 to $18.6 million in 2024, driven by reductions in income tax expense, professional fees, and other expenses.

The company reported a net investment loss of $14.0 million in 2024, compared to a $13.4 million net investment loss in 2023. Net realized losses on investments improved from $11.9 million in 2023 to $5.0 million in 2024. However, the company had a net change in unrealized depreciation of $19.0 million in 2024, compared to $30.5 million in unrealized appreciation in 2023.

Liquidity and Capital Resources

As of December 31, 2024, SuRo Capital had $37.6 million in cash reserves and liquid securities, down from $107.5 million at the end of 2023. The decrease was primarily due to new investments, operating expenses, debt interest payments, and a $9.4 million share repurchase program.

In 2024, the company issued $30 million in 6.50% Convertible Notes due 2029 and repurchased $30.3 million of its outstanding 6.00% Notes due 2026. SuRo Capital has no material contractual obligations coming due in the next year.

Outlook

SuRo Capital continues to focus on identifying promising investments in high-growth, venture-backed companies across its key industry themes. The company maintains ample liquidity to support its near-term capital requirements through its cash reserves, liquid securities, and debt capital. However, the company faces risks related to economic conditions, market volatility, and the performance of its portfolio companies that could impact its future results.

Overall, SuRo Capital’s investment strategy, portfolio composition, and financial position provide a solid foundation, though the company’s future performance will depend on its ability to effectively deploy capital, manage risks, and navigate the evolving venture capital landscape.