Tern PLC - Portfolio Update
("Tern" or the "Company")
Tern Plc (AIM:TERN), the investment company specialising in the Internet of Things ("IoT"), is pleased to provide an update on the recent activities of the Company and its principal portfolio companies.
· Strong business momentum seen in Q4 2020 across all of Tern's principal portfolio companies and continuing into 2021.
· Device Authority finished 2020 strongly, closing five key orders in their primary sectors and recording its strongest ever trading quarter in Q4 2020.
· The shareholders of Wyld Networks and Wyld Technologies have reached agreement on a consolidation of the business into Wyld Networks to create a more traditionally investable structure.
o As a result, Wyld Technologies will now be owned 100% by Wyld Networks.
o The positive momentum has continued for Wyld, with highlights including the signing of Alliance Corporation to market Wyld Connect in
· Fundamental VR announced three significant contract wins in late November and early
· InVMA finished the year strongly with significant contract wins with both existing and new customers in Q4 2020.
· Since the investment by Tern in
"As I commented in our last portfolio update, issued last November, 2020 was both a year of challenges, particularly in light of COVID-19, but also one of significant opportunities. All of Tern's principal portfolio companies enjoyed strong positive momentum during 2020, which accelerated during Q4 and we anticipate will continue through 2021. They have been engaging with globally recognised customers, world class channel partners, and winning repeat business, demonstrating real progress towards our goal of generating significant value for Tern's shareholders. The Tern board see this progress not just in terms of the current trading performance of the portfolio companies, but also the increasing number of critical proof points of their business models and processes, elements that are particularly important if value is to be unlocked, as is our goal, through third party investment, especially from US venture capital firms.
"Tern now has a diversified portfolio of IoT focussed businesses, at various stages of maturity, that are benefiting from the synergies of being part of the Tern ecosystem and I believe now provide our shareholders with an appropriate balance of risk and reward. The fundamental value and attractiveness of our portfolio has increased significantly through the performance and relevance achieved during 2020 and we believe will continue to do so during 2021. We also believe this underlying value will be recognised during this year as our portfolio companies secure third-party expansion capital through syndicated funding rounds.
"We look forward to providing further regular updates on the Company and its portfolio during 2021."
Detailed Portfolio Update
Device Authority Limited ("DA" or "Device Authority")
Sector: IoT Security
Holding: Tern has a 56.8% holding in DA (A shares) and as at
Despite the disruption caused by the COVID-19 pandemic, DA finished 2020 strongly, closing five key orders in its primary sectors in Q4 2020. These orders were:
· The conversion of two existing pilot customers, one in the EU/US and one in the
· An initial engagement for a new marquee EU-headquartered Fast Moving Consumer Goods ("FMCG") customer working with Wipro;
· The renewal by an existing medical company customer as it advances from pilot to production, with the addition of new devices; and
· A new pilot with an EU/US medical device company, who is launching its products in 2021.
Three of these orders resulted from the Microsoft and Wipro partner channels, as the relationships with partners continues to develop as planned. This includes engagement with the Microsoft Azure IoT, Sphere and Edge teams, as the requirement to simplify, and automate, the provisioning and security of IoT devices, networks and data at scale continues to be a market challenge. Although the partner channel has taken time and investment to develop, indications are that this strategy is starting to deliver the intended customer outcomes. As a result, Device Authority expects this channel momentum for KeyScaler to continue in 2021, as the requirement for automating IoT life cycle management continues to develop as a 'must have' in its focus sectors of automotive, IIoT (industrial) and IoMT (healthcare).
Additionally, the COVID-19 pandemic has triggered a new wave of cybercriminal opportunists at an unprecedented speed and scale, and the adoption of security technology continues to rise steadily to meet this demand. In particular, the past year has seen increased usage of telemedicine and the deployment of medical and healthcare devices. As IoT device adoption increases, protecting the full lifecycle management of devices and data, both on and off network, becomes more challenging, and creates demand for solutions such as Device Authority's KeyScaler, which become integral components of successful cybersecurity strategies.
Device Authority is taking a leadership position in addressing this expanded threat and will conduct a virtual IoT Security Summit in
FVRVS Limited ("FundamentalVR" or "FVR")
Sector: Healthcare IoT
Holding: Tern has a 26.9% holding in FVR and as at
In late November and early
FundamentalVR is also working with other leading pharma companies to implement its immersive, data driven, simulation platform for use in gene and cell therapies used in Regenerative Medicine applications, expanding its market reach beyond its historic orthopaedic and ophthalmology market focus.
COVID-19 has had a considerable impact on the healthcare industry, particularly regarding how new products and procedures are brought to market. The Tern Board is pleased with the technological advances made by FundamentalVR during 2020 that are helping companies train their sales teams, doctors and hospital staff on these new capabilities as the pandemic has created the requirement for contactless solutions. The Tern Board believes that FundamentalVR's 2021 sales pipeline and its repeat business from its existing customers reflects the importance of these market drivers and will help establish the company as a leader in its field.
InVMA Limited ("InVMA")
Sector: IoT enablement
Holding: Tern has a 50% holding in InVMA and as at
Despite a challenging 2020 with the impact of COVID-19 felt throughout the industrial IoT sector, InVMA finished the year strongly with Q4 2020 including significant contract wins with both existing and new customers. This momentum is forecast to be carried into Q1 2021 and is complimented by a growing pipeline of diverse customers for both AssetMinder® and professional services, new channel partner opportunities and environmental services bids.
InVMA has worked hard to hone its go-to-market strategy, develop traction in the US and grow its customer base throughout the
InVMA's growth coincides with a time when the industrial physical and digital worlds continue to show convergence. PWC reported that 90% of industrial companies are investing in digital factories, and McKinsey suggests that 70% of companies are considering digital manufacturing at the top of their operations-strategy agendas. AssetMinder's® return on investment potential can be realised by preventing one unplanned event, and is achieved by helping customers remotely monitor assets, reducing their operating costs through condition and predictive monitoring and developing new digitally-enabled revenue streams.
Wyld Networks Limited ("Wyld" or "Wyld Networks")
Sector: IoT enablement
Holding: Tern holds 96.74% of Wyld Networks Limited and as at
Tern, the sole shareholder of Wyld Networks and the minority shareholders of Wyld Technologies, have reached agreement on a consolidation of the two businesses into Wyld Networks, which is now underway. The directors of Wyld, supported by Tern, believe that this will result in a more traditionally investable structure. As a result, Wyld Technologies will now be owned 100% by Wyld Networks and Wyld Networks will be held 96.74% by Tern, with the remainder held by management and other shareholders.
Wyld markets a portfolio of solutions with broad application in multiple sectors leveraging its patent pending technology. This portfolio includes:
Wyld Connect - Terrestrial and Satellite IoT
Wyld continues to supply both development services and products for its existing terrestrial Low Power Wide Area Network ("LPWAN") modules into the IoT connectivity market. As reported in
In advance of Wyld's partner's proposed commencement of a deployment of a low earth orbiting satellite constellation in 2021 to provide global coverage, Wyld is in discussions with distribution and cooperation partners for the solution and is pleased to announce the signing of a contract with Alliance Corporation covering the North American region. Alliance Corporation will also market the Wyld Connect terrestrial products as part of their distribution portfolio.
Wyld Mesh and Connect - Wireless mesh networks and COVID-19 social distance monitoring and alerting networks
Wyld Mesh connects smartphones directly to smartphones without the need for 4G or WiFi, allowing brands to build their own wireless networks with the aim of improving their customers' experience and generating new revenue streams through location-based marketing and the data generated. In the consumer sector this has applications in retail, sporting and entertainment venues.
In response to the COVID-19 pandemic, Wyld Networks has focussed on combining Wyld Mesh and Wyld Connect to create a solution to monitor, alert and measure social distancing in multiple sectors including healthcare, education and business in general.
In the care home environment, the roll out of the COVID-19 social distance monitoring and alerting network solution in
Wyld Networks continues to deliver solutions against its existing contracts with Delta-T, Develco, RCD, CADIS, Eltek and Envirosystems, among others.
Talking Medicines Limited ("Talking Medicines")
Holding: As announced on
Talking Medicines captures the voice of the patient experience by medicine, focussing on the opportunity to address the blind spot for pharma companies in understanding patients in the real world.
Since the investment by Tern and the Scottish Investment Bank in
via IFC Advisory
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