|Tera Global Innovation Fund-December 2023
(Tera Innovation LP Distributions: ’19-$43.45- Return of Capital)
The net asset value is unchanged the last 6 months with no price changes in the 3 remaining private core holdings. Combined with the cash distribution in 2020, the total LP value is $110.96, excluding tax benefits.
The last 12 months saw continued corporate progression. Combined revenues exceed $100M. Recall that the LP invested early in these private companies with little to no revenue. Pesa is the largest holding at 52% followed by Vivecrop at 31%, and Solace at 12%.
Pesa has made a successful transition from a legacy hardware mission video system (MVS) platform to a software company as part of a modernization and restructuring effort to maximize return. Software recurring revenue companies are valued much higher than hardware companies. The company is now 100% software development. The product is called Secura which starting shipping a year ago and is unique. In the first year, Secura has been purchased by the US Department of Justice, Air Force and Army. This bodes well. Secura is currently under lab testing to be placed on the DoD Approved Products Listing (APL) that is expected in 2024. This certification milestone will accelerate government and international adoption. While the decision to focus initially on Government markets is harvesting results, the application applies to any environment requiring a high level of security with access privileges based on policy. Recent interest includes commercial command and control centers and hospitals. The cybersecurity threat to infrastructure and private data is very real. This is very large market. The average sale is up materially along with the important shift to recurring software revenue. Pesa has not received any outside equity capital in over a decade protecting shareholder value while over US$17M from continuing operations has been invested in Secura. We remain very positive that the LP unitholders will be rewarded.
Vivecrop has successfully closed financings and introduced new products over the past year that continues to fund its expansion. The past year focus has been on growing the product pipeline and commercial presence in both US and Canada. ViveCrops chemistry help farmers improve ROI, sustainability and efficiency. If you are interested in following Vivecrop, the company does regular updates on LinkedIn. Activity is robust and we continue to be very positive on Vivecrop’s future.
As the LP contains private companies only, comments and pricing will be distributed and updated semi annually or when significant news. Distributions will occur with future liquidity events.
The next update is the period ending June 30.
Take care and stay safe.