Tern’s FY23 results showcase improving metrics that are likely to attract additional strategic interest across its portfolio. All companies within Tern’s portfolio are experiencing significant commercial traction. Configuration work is transitioning to repeat licencing through SaaS models, and high-profile customer bases are expanding. However, despite these improvements, valuations in the global technology landscape remain depressed. This downturn has impacted Device Authority and Wyld, as detailed overleaf. Consequently, Tern has reported a £12.4m reduction in net assets.
Despite the reduction in net assets, Tern’s funding-to-exit model necessitates patience. All portfolio companies have now entered their growth stages and are leaders in their targeted markets. Management is continuously driving value creation from its high-growth businesses in sectors poised for substantial expansion. We anticipate positive developments in the coming months.
Key Highlights
- Device Authority: Raised significant new funds, enabling the company to build on its partnerships with Microsoft, Entrust, Cybertrak, and PTC.
- FundamentalVR: Improved revenue and gross margin, benefiting from Apple’s continued expansion in the metaverse and featuring in Meta’s global advert campaign.
- Talking Medicines: Well-established in a category of artificial intelligence (AI) achieving 50x revenue multiples. It has secured partnerships with Socialgist and Sermo Physician Community.
- Wyld: Entering its revenue phase with strong relationships with the European Space Agency, Eutelsat, Bayer Crop Science, and Thales. Tern is set to benefit from the public market valuation as Wyld progresses.
Tern’s management continues to drive value creation from its portfolio, which consists of high-growth businesses in promising sectors. While the current global technology valuation landscape poses challenges, the significant improvements in performance metrics and strategic partnerships indicate a positive outlook for Tern’s future. We look forward to a steady stream of positive news over the coming months.
Tern plc (LON:TERN) backs exciting, high growth IoT innovators in Europe. They provide support and create a genuinely collaborative environment for talented, well-motivated teams.
