Building great companies

1. Building great companies Interims 2019 Private and Confidential

2. Important Notice The information contained in these slides and the accompanying oral presentation (together, the "Presentation") have not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 ("FSMA"). The information contained in this Presentation has been prepared by Tern PLC (the "Company"). If any person is in any doubt as to the contents of this Presentation, they should seek independent advice from a person who is authorised for the purposes of FSMA and who specialises in advising in investments of this kind. The information contained in this document does not purport to cover all matters that may be relevant for the purposes of considering whether or not to make any prospective investment and is not intended to provide, and should not be relied upon, for accounting, legal or tax advice. This Presentation is supplied to you solely for information.  The Presentation does not constitute an admission document, prospectus or listing particulars relating to the Company or its group; it has not been approved by the London Stock Exchange or the Financial Conduct Authority, nor does it constitute or form part of any offer, invitation, inducement or commitment to, sell, issue, or any solicitation of any such offer or invitation to subscribe for, underwrite or buy, any shares in the Company or any of its affiliates to any person in any jurisdiction, nor shall it nor any part of it, nor the fact of its distribution form the basis of, or be relied on in connection with, or act as any inducement to enter into any contract or investment decision in relation thereto.  No undertaking, assurance, representation or warranty, express or implied, is made or given by or on behalf of the Company or any of the existing or proposed members, agents, affiliates, representatives, advisers, employees or directors or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this document and no responsibility or liability is accepted by any such person for any loss however arising from any use of, or reliance on, or in connection with, this Presentation or its contents or otherwise arising in connection therewith. Notwithstanding this, nothing in this paragraph shall exclude liability for any such undertaking, assurance, representation or warranty made fraudulently. Certain statements in the Presentation are forward-looking statements, and the Presentation itself has been based upon a number of assumptions, forecasts and projections of the Company which by their nature are forward looking and should not be relied upon in isolation. Forward-looking statements are typically identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "could"," should", "intends", "estimates", "potential", "anticipate", "plans" or "assumes" or similar expressions, or by discussions of strategy that involve risk and uncertainties. By their nature, forward-looking statements, assumptions, forecasts and projections involve a number of risks and uncertainties, and in some cases are based on estimates and incomplete information, that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements or by the Presentation as a whole. These risks and uncertainties, and the impact they have on the assumptions, forecasts and projections contained in the Presentation, could adversely affect the outcome and financial effects of the plans and events described herein. The distribution of this document in certain jurisdictions maybe restricted by law and therefore persons into whose possession this document comes should inform themselves about and observe any such requirements or restrictions and must not be distributed in any jurisdiction in which it would be unlawful. Any such distribution could result in a violation of the law of such jurisdictions. The securities referred to in this presentation have not been and will not be registered under the US Securities Act of 1933, as amended, (the "US Securities Act") or under any securities laws of any state or other jurisdiction of the US and may not be offered, sold, resold, taken up, exercised, renounced, transferred or delivered, directly or indirectly, within the US, Australia, Canada, Japan, the Republic of Ireland or the Republic of South Africa, or to, or for the account or benefit of, any person with a registered address in, or who is resident or ordinarily resident in, or a citizen of, the US, Australia, Canada, Japan, the Republic of Ireland or the Republic of South Africa, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and/or any other applicable securities laws.

3. Summary of the 6 months ended 30 June ‘19 An AIM listed investing company, with strong links to Silicon Valley, dedicated to investing in high growth IoT businesses • Strong growth in value of investment portfolio, net assets and turnover of portfolio • Net assets per ordinary share has increased year-on-year to 6.9p (30 June 2018: 6.2p) • Number of employees within principal portfolio companies increased by 9% • Forecast 50% increase in turnover for principal portfolio companies for year to 31 December 2019 (2018: 58% increase) • Total invested capital to date at 30 June 2019 stands at £15 million • £1.5 million raised during the six month period and £1.4 million re-invested in existing portfolio companies

4. HY 2019 key metrics * Excluding Push Technology and Seal Software – % shown is forecast for full year 2019 and actual for full year 2018

5. Balance sheet

6. Long-term value creation 01. Clarity of focus IoT / IoMT UK investees, US opportunity Business Drivers 02. Quality investments Device Authority and Fundamental – superb positioning and industry credibility Selected additional deals building sector and business model diversification Healthy pipeline given network of contacts 04. Exit, reinvest and “go again” Demonstrate value creation Pursue follow-on rounds more in line with US values (eg via US venture partners) Use this ability to bolster pipeline within UK deal landscape Consistent NAV growth 03. Intelligent “nurture” Ecosystem and synergistic benefits Rigorous approach and clearly articulated methodology Active involvement in investee managements (and changes) Establish and early build Consolidate and grow value Evolve and expand scale & scope

7. Focused on delivering on strategic objectives De-risk and drive value by building great companies Deliver net asset value and net asset value per share growth Portfolio Diversification Realisations through trade or other strategic partners Expand Co-Investor Network

8. NAV growth over time

9. Solving specific problems Tern targets its investments in three areas of the IoT market: • IoT security solutions and messaging platforms which provide the user with an interface to connect and to manage the IoT solution • IoT platforms that provide data analytics, data storage components and services • IoT systems integration and automation companies

10. Internet of medical things Growth rates between 2017 and 2022E Source: Progressive Research

11. IoT spending within manufacturing sector A shift from hardware to software & services (global billions $) Source: Progressive Research

12. 2019 portfolio priorities • Providing hands-on support to achieve value creation and making introductions which help our companies achieve scale and a presence in the USA; • Strengthening management and boards where appropriate; • Syndication of post-seed round investments in our companies, focusing on relevant strategic and financial investors, to provide validation, and additional growth capital that de-risks the path to commercial success and monetisation; and • Exploring innovative ways to expand the synergistic benefits of our portfolio.

13. Building great companies • Continue to de-risk and drive value by building great companies • Focus on value creation within portfolio companies with aim to achieve fair value uplift – direct input from Tern investment directors • Expand our participation in the start-up ecosystem in the UK, through direct investments and innovative partnerships. • Actively attract new strategic and financial investors into existing portfolio companies • Achieve US Venture Capital valuations for our UK investments in later series 'B' rounds and beyond - targeted to achieve an average of 20% year-on-year growth in portfolio value by year end 2019 and beyond.

14. Questions 20 Eastbourne Terrace London, W26LG e: info@ternplc.com t: 020 3807 0222 ternplc.com