Shares in Tern PLC (AIM:TERN), which backs early-stage Internet of Things and artificial intelligence businesses, fell as much 10% after the technology investor reported a sharp drop in the value of its portfolio.
Net assets fell 36% to £6.9 million over 2025, down from £10.7 million a year earlier.
The decline followed a £4.1 million reduction in the fair value of its investments.
The biggest single hit came from Fundamental XR, a medical training platform, whose carrying value fell by around £2 million.
Tern also wrote its stake in the Sure Valley Ventures fund down to nil, after being declared a defaulting investor for missing a capital call in October.
The company said a new valuation method, focused on the worth of its specific holdings rather than whole companies, had contributed to the markdowns.
Tern reported a total comprehensive loss of £5.1 million, wider than the £3.8 million loss in 2024.
The investor has not completed any exits during 2025 or so far in 2026.
It argued this reflected timing rather than a lack of progress, with portfolio companies approaching potential liquidity events.
Device Authority, a provider of security software for connected devices, and Fundamental XR are both said to be advancing towards exit routes.
Talking Medicines, an AI business serving pharmaceutical marketers, is gaining commercial traction.
Tern closed the year with just £50,000 in cash, down from £400,000, having continued to fund its portfolio.
After the initial slump, the stock settled at 1.04p, down 5.4%.
