Tended EIS

Trebled ARR to £1.1 million in nine months: geofencing technology keeping workers safe, akin to a “Google Maps for heavy industry”

In the UK, Network Rail is responsible for maintaining more than 20,000 miles of track – but despite a strong focus on trackside safety, accidents do happen and can cost lives and £millions.

Existing safety measures are outdated and Network Rail recognises new technology is needed to meet current Health & Safety regulations. It has allocated a specific portion of its £44 billion 5-year budget to improve safety, identifying geofencing as a key technology for this.

In collaboration with Network Rail, Tended Limited (“Tended” or the “Company”) has created a geofencing solution that can improve safety and help prevent accidents in rail and heavy industries.

Users can set ‘safe’ and ‘unsafe’ locations on an easy-to-use dashboard. Meanwhile, Tended’s high-precision positioning wearables pinpoint where workers are, alerting them if they are unsafe. The technology uses Global Navigation Satellite System (GNSS) and real-time kinematics (RTK) to provide location accurate to 1 cm – think of it as an ultra-precise version of Google Maps. It can also be used to locate and track physical assets such as plant and machinery.

Tended’s solution is quick to implement, doesn’t require trackside infrastructure and is up to 40% cheaper than the competition.

Launched in March 2023, Tended’s technology is currently used across the rail industry by leading organisations – including Network Rail, Siemens, AmcoGiffen, SPL Powerlines, and RSS Infrastructure.

Since closing its previous round in December 2023, Tended has tripled its Annual Recurring Revenues (ARR) from £0.35 million to £1.1 million. The total contract value of the pipeline is currently £3.9 million ARR.

Network Rail makes up c.40% of pipeline ARR and is expected to sign five-year contracts, often paying multiple years in advance. The remaining pipeline comprises Tier 1 Contractors who generally sign multi-year contracts, paying annually in advance.

Over the next two years, management intends to develop its Version 2 (V2) product: an upgraded product with enhanced user experience and functionality. This should allow the Company to build on its success in the UK rail market and expand into related markets, e.g. UK utilities, UK highways and international rail.

Now, to support the team’s expansion to deliver new and existing contracts, as well as fund the development of Tended V2, the Company is seeking to raise £1 million under EIS. To date, £0.5 million has been committed by existing institutional investor Blackfinch Ventures – subject to matching by other investors. 

Management is forecasting £2.8 million ARR by June 2025, provided the near-term pipeline converts as expected, growing to £11.4 million ARR and £2.8 million EBITDA in Year 5 (FY29) – not guaranteed. There are some additional growth opportunities not included in these forecasts; however, management wants to present numbers it considers achievable – not guaranteed.

Predicated on these forecasts, investment in this round could return 5-7x in FY29 (IRR 45%) after performance fees, but before EIS tax relief. Investing at this early stage means rewards could be significant, but so are the risks.

The minimum investment is £21,258 and you can apply online. 

The deal at a glance

Company by numbers

• Grown to £1.1 million ARR since launching in March 2023
  
• Forecasting £2.8 million ARR by 30 June 2025
• Advanced pipeline worth £0.9 million ARR expected to convert in the next 6 months
• Pipeline of £3.9 million ARR in annual and multi-year contracts
• Backed by two institutional investors Blackfinch Ventures and Basinghall Partners
• Approximately 900 devices deployed to date
• Contracted services typically 12-60 months, within 5 year framework agreements
• Average onboarding time: one month

Risks – important

This is a single-company offer with no diversification. It involves investing in an early-stage, loss-making business, which is by nature high risk and prone to failure. There is a risk that the capital raised may not be sufficient to achieve the Company’s objectives. You could lose all the amount you invest.

Like all investments available through Wealth Club, it is only for experienced investors happy to make their own investment decisions without advice.

There is no ready market for unlisted EIS shares: they are illiquid and hard to sell and value. There will need to be an exit for you to receive a realised return on your investment.

Exits are likely to take considerably longer than the three-year minimum EIS holding period; equally, an exit within three years could impact tax relief. The value of tax benefits depends on circumstances and tax rules can change. 

Before you invest, please carefully read the Information Memorandum, which contains further details on the considerable risks – alongside the Wealth Club Risks and Commitments.

Fees and structure

Investors will pay no direct initial or ongoing charges to invest. Fundraising costs are being met by the Company. Wealth Club will be entitled to a performance fee on exit. 

Wealth Club investors will invest using a nominee structure. This service is provided by Wealth Club’s subsidiary companies Wealth Club Asset Management Limited (authorised and regulated by the FCA) and Wealth Club Nominees Limited. Wealth Club Nominees Ltd will be completing the share subscription documentation on investors’ behalf.

Please refer to the Schedule of Charges for more details on charges (may vary for different rounds).

All the services Wealth Club and, where applicable, its subsidiaries provide are governed by the Terms and Conditions of the Wealth Club Services.

Our view

In our view, Tended has shown good growth since the last funding round, materially delivering its forecasts. It continues to have a well-developed pipeline of opportunities and long-term contracts.

That said, uncertainty around the timing of new contract wins has made forecasting difficult.

We believe the business has a strong market position in the rail industry. It has built valuable relationships with its customers; this could help Tended grow within its existing blue chip customers as well as expand into adjacent and complementary verticals. The Company has firm support from its institutional shareholders and is set to be fully funded to deliver the growth plan The Wealth Club allocation is £500k. 

We consider this to be a compelling, albeit high-risk, EIS investment opportunity – you should form your own view.

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.