Tern plc (LON:TERN) continues to solidify its reputation as a leading venture capital firm focused on transformative IoT and AI-driven technology businesses. The latest research note from Progressive Research, dated 6 June 2025, offers a compelling snapshot of Tern’s performance and potential, highlighting a year of meaningful progress across its core portfolio despite broader market headwinds.
Operational and Financial Highlights
In 2024, Tern’s unique hybrid venture capital model yielded substantial operational progress within its three core portfolio companies: Device Authority, FundamentalVR, and Talking Medicines. Although annual recurring revenue (ARR) declined by 17%—following a robust 50% rise in 2023—this was accompanied by a 51% reduction in headcount, reflecting a shift to a leaner, more efficient operation. As a result, ARR per employee increased by 67%, a key indicator of enhanced productivity and scalability.
The fair value of the portfolio demonstrated resilience, with a modest £1.6m decline in net assets to £10.7m. This compares favourably with an £11.1m drop in 2023, largely driven by adjustments related to Wyld Networks. The value of Device Authority edged down to £4.3m due to an asset sale and currency effects, while FundamentalVR held steady at £3.6m. Notably, Talking Medicines saw a valuation increase to £2.1m.
Tern reported a total comprehensive loss of £3.8m for the year, significantly narrower than the £12.6m loss in 2023. Administrative and other costs were also cut considerably, thanks in part to a restructuring of the board and the full-year effect of new non-executive directors.
Core Portfolio Performance
Device Authority, valued at £4.3m, gained new customers in 2024, especially in the United States, where it has established a solid go-to-market presence. The business expanded its partner network with key collaborations including CyberArk and Microsoft, alongside a major milestone investment from Ten Eleven.
FundamentalVR continued to thrive, maintaining a valuation of £3.6m. Its flagship platform, Fundamental Surgery, gained increasing traction with healthcare professionals and institutions such as the American Academy of Ophthalmology and the Royal College of Surgeons of England. Notably, Meta showcased the company’s work in collaboration with Orbis for eye surgery training.
Talking Medicines, now valued at £2.1m, had a breakthrough year. Its AI-driven Drug-GPT platform for collecting patient feedback has earned considerable attention from top US healthcare agencies and pharmaceutical firms. With over 2.9 million data points entrusted to its platform, Talking Medicines is well-positioned for its next phase of growth.
In contrast, Wyld Networks faced significant setbacks, with a valuation drop from £2.4m to just £0.003m following a dilutive funding round that Tern did not participate in. Meanwhile, Konektio‘s equity value was written off due to administration.
Strategic Partnerships and the ‘Fund of Funds’ Approach
Tern has also made notable strides through its strategic investment in Sure Ventures. Its 6.1% interest in Sure Valley Ventures Fund 2 (SVV2) and a 2.7% holding in Sure Ventures plc provide exposure to maturing investments and a diversified tech portfolio. The SVV1 fund recently recorded an 85% uplift in NAV with the $450m sale of Landvault and a 4.5x return on the sale of Getvisibility.
This “fund of funds” strategy reduces concentration risk and broadens Tern’s exposure to high-growth opportunities, while service relationships—such as Bruce Leith’s executive chairmanship at Purple Transform—create additional income streams.
As Gareth Evans of Progressive Research notes, “Tern has seen a year of progress in 2024, despite the challenges faced, propelling its core portfolio to become technology leaders, albeit with relatively limited funding.”
Investment and Funding Outlook
Tern continues to secure strategic funding, with two oversubscribed placings raising £221k in early 2025 and £400k in December 2024. While further funding will be necessary to sustain long-term growth, the improving attractiveness of its portfolio to third-party investors bodes well. Importantly, capital needs are decreasing as companies such as Device Authority secure secondary funding tranches from reputable investors like Ten Eleven.
Financial Highlights (FY 2024)
- Net Asset Value (NAV): £10.7m (down from £12.3m)
- NAV per Share: 2.0p
- Comprehensive Loss: £3.8m (2023: £12.6m loss)
- Cash Balance: £0.4m
- Operating Expenses: £1.2m (down from £1.7m)
- Valuation of Core Holdings:
- Device Authority: £4.3m
- FundamentalVR: £3.6m
- Talking Medicines: £2.1m
On a Final Note
Tern remains focused on supporting its portfolio companies through critical growth phases, especially as the venture ecosystem increasingly values early-stage software and AI innovations. The firm’s proactive and hands-on approach is paying dividends, not only in portfolio performance but also in the diversification achieved through Sure Ventures.
With strong traction across core holdings and a robust strategic framework, Tern is well placed to leverage the momentum from 2024 into meaningful growth and shareholder value creation in the years ahead.
