Tern Plc (LON:TERN), the investment company specialising in supporting high growth, early-stage, disruptive Internet of Things technology businesses, has announced that its portfolio company, InVMA Limited, which trades as Konektio has agreed a £2.5 million equity fundraise, to be completed in two tranches. The first tranche of £1.2 million has completed and the second tranche of £1.3 million is due for completion in Q4 2023.
Tern has invested £100,000 in the Konektio First Tranche, with the remainder provided by Konektio’s other institutional shareholders, being Mercia and Foresight. Prior to the Konektio First Tranche, Tern had a shareholding of 39.9% in Konektio with an unaudited book valuation of £1.0 million. Post the Konektio First Tranche, Tern’s shareholding in Konektio has reduced to 28% (before any dilution on exercise of any Konektio employee share options) and Tern’s shareholding now has an unaudited book valuation, at the Konektio First Tranche price, of £0.9 million.
Including its participation in the Konektio First Tranche, Tern has, to date, invested approximately £2.3 million in Konektio. The pre-new money valuation for the Konektio First Tranche is approximately equivalent to the pre-money valuation for the previous Konektio fundraise announced on 25 April 2023, with Konektio having increased its employee share option pool.
Tern has committed to invest a minimum of £0.28 million in the Konektio Second Tranche, with an option, at its sole discretion, to increase its investment amount up to £0.4 million. The price of the Konektio Second Tranche will be determined as at 30 September 2023 and will be based on the annualised revenues of Konektio at that time, capped at a pre money valuation of £6.0 million. Should Tern not fulfil its commitment to invest a minimum of £0.28 million in the Konektio Second Tranche, 75% of Tern’s holding in Konektio will be transferred to a valueless class of Konektio deferred shares.