Tern's Device Authority raises an extra $2m

7th Feb 2024 13:23

(Sharecast News) - Early-stage technology investor Tern announced the completion of an additional second closing of tranche one series B funding by Device Authority on Wednesday, in which it held a 35.7% shareholding.

The AIM-traded firm said the second closing secured an additional $2m in new equity investment from Mercato Partners, a private equity firm based in Cottonwood Heights, Utah.

It added to the previously-announced fundraising, bringing the total planned investment to $9.3m, including the $3.7m from Ten Eleven Ventures and $0.3m from Alsop Louie Capital 3.

The funding was aimed at facilitating Device Authority's growth strategy, particularly in expanding its operations in the US beyond 2024.

Following the second closing, Tern now holds 31.7% of Device Authority's equity, valued at $7.5m (£6m) based on the fundraising issue price.

On acceptance of the National Security and Investment Act approval by Ten Eleven Ventures and completion of tranche two of the fundraising, Tern's equity in Device Authority would decrease to 26.7%, valued at $7.2m (£5.7m).

Device Authority also strengthened its Board with appointments including Dave Palmer, general partner of Ten Eleven Ventures; Tim Eades, chief executive officer and co-founder at Anetac and the new chairman of Device Authority; and Grace Cassy, co-founder of cybersecurity investment firm CyLon Ventures.

"We are pleased with Device Authority's ability to attract high calibre US investors as it continues to secure new logos," said Tern chairman Ian Ritchie.

"Device Authority's progress will be further accelerated with this significant investment from another US investor and the additional funding will allow Device Authority the flexibility to be more opportunistic in the marketplace.

"We believe the additional capital and resources from Mercato Capital will enable a broader expansion of Device Authority's go-to-market programmes in the US that we believe will ultimately have an effect on the multiples for exit valuations."

Ritchie said the global cybersecurity market segment was continuing to experience double-digit growth, adding that establishing a substantial presence in the US should result in a greater return for Tern's shareholders.

"Mercato Partners has a history of providing operational support to develop technology businesses to the stage when a valuable exit can be achieved.

"We look forward to working with the Mercato team and the other investors in the syndicate to accelerate the growth of the business to maximise the investment value for Tern shareholders."

At 1157 GMT, shares in Tern were down 0.78% at 2.23p.

Reporting by Josh White for Sharecast.com.