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Tern invests in surgical simulation firm FundamentalVR
Specialise 'internet of things' (IoT) investment company Tern has raised £0.7m before expenses through an unconditional placing of 3,783,784 new ordinary shares, it announced on Monday.
The AIM-traded firm said that, together with the funds it raised on 8 May, had facilitated the acquisition of a 18.3% holding in FundamentalVR for £0.8m.
It said FundamentalVR had built an immersive simulation application training platform for surgeons, which created virtual reality simulations of procedures.
The investment would provide Tern with exposure to the rapidly-growing medical simulation market, the board explained, which was anticipated to grow to $2.3bn by 2021.
Based on FundamentalVR's latest statutory accounts for the year ended 31 December 2016, the firm had net assets of £96,940 and a retained profit of £63,768 for the year.
FundamentalVR would use the funds to develop a software-as-a-service delivery system, enabling it to add to its surgical simulations and broaden its customer base.
The investment was the first of its kind for Tern, as FundamentalVR is in the IoT healthcare services market with its applications using VR and haptic devices.
Tern said the transaction was in line with its strategy to increase its portfolio to around 12 investments, bringing the number of portfolio firms to seven.
"We are truly excited to add FundamentalVR to our portfolio of potentially transformational companies," said Tern CEO Al Sisto.
"FundamentalVR is a highly disruptive company with the potential to improve patient outcomes in the medical industry."
Sisto said FundamentalVR's "experienced" management team had the credentials to steer it to capitalise on the rapidly-growing medical simulation market, and in the process create shareholder value for Tern.
"We look forward to working with them to help them achieve their ambitions of building a world leading SaaS-based immersive surgical simulation platform using haptic intelligent feedback via VR to respond to surgeons in real-time.
"With a range of customers already engaged and generating revenue, they have a great platform from which to grow."
FundamentalVR CEO, Richard Vincent, added that his company was "delighted" to secure an investment from Tern.
"This investment in our business will help to accelerate us into market and build out a market leading SaaS based training business," Vincent explained.
"Less than half of one percent of surgeons worldwide have any day-to-day access to surgical simulation.
"Through our platform, Fundamental Surgery we believe that our strategy of high-end simulation through low-cost immersive technology will help to dramatically change this over the coming years and put quality training within arm's reach of surgeons across the globe."