Case Study: Kraken Robotics — How We Found a ~6x Return in Subsea Defense Tech

In September 2024, we published our original thesis on Kraken Robotics (TSXV: PNG / OTCQB: KRKNF) on Value Investor Club, initiating a position at roughly CDN $1.15/share. Today, shares trade north of CDN $6, and the company's market cap has grown from ~C$280M to over C$1.8B.

Our new case study walks through the full arc of that investment: the pressure-tolerant subsea battery monopoly that first caught our attention, the Anduril AUV relationship that anchored our growth thesis, the outstanding capital allocation from CEO Greg Reid's management team, and the transformative Covelya Group acquisition that closed this July and repositioned Kraken from a component vendor into a full AUV subsystem prime.

We also do something we think matters more than the win: we grade our own thesis. What did we get right? What surprised us? Where did our original model diverge from what actually happened? And what would change our view from here?

This is the same four-pillar framework (high quality business model, outstanding management, high growth prospects, and reasonable valuation) we apply to every position at Deep Sail Capital. We hope walking through it in detail is useful whether you're tracking Kraken specifically or just want a look at how we think about underwriting a position from initiation through to today.

Read the full case study below.

Kraken Robotics - Deep Sail Capital - Case Study.pdf

Download PDF • 483KB