One thing that the COVID-19 pandemic has shown is that access to essentials such as medical care and food continues is extremely important.
A company that helps to enable the next-generation medical and food companies to become more established is TheTrendlines Group Ltd (SGX: 42T).
The Trendlines Group invents, incubates and invests in medical and agrifood technology companies in Israel and Singapore.
Furthermore, it provides those companies with support including technology development, business development, marketing, commercialisation, investment and financial strategies.
To date, the company has exited 10 portfolio companies, with an enviable average return on investment of 9.7x per exit and a weighted average internal rate of return of 175%.
Source: The Trendlines Group’s Investor Presentation December 2022
With that as a background, here are five interesting things about The Trendlines Group that investors should know about.
#1 Describe The Trendlines Group’s current products and service offerings?
The Trendlines Group is a leading Israel and Singapore-based investment group that invests in innovations in agrifood and medical technologies. The Group has a large portfolio of companies ranging from early-stage start-ups to revenue-stage companies. We establish and invest in companies primarily through our incubators and we also manage two venture funds.
We leverage our partnerships with investors, strategic players, inventors, and governments to provide our portfolio companies exposure and access to international players and markets. Our experience, partnership network, and resources are central to helping us achieve our mission of investing in companies to improve the human condition through food and health.
Source: The Trendlines Group’s Investor Presentation December 2022
#2 Having a “moat” or a competitive advantage is something many investors look for in companies they invest in. Can you share how the Group has a strong advantage?
Trendlines’ founders strongly believe in partnerships that provide win-win situations for all parties. Both in Israel and in Singapore, there is government investment alongside the private sector, as both countries realize the immense power that this model has in accelerating innovation. Trendlines leverages this to mitigate our risk, bringing on more capital and partners in the early due diligence stages. Over the years, we have established deep organizational knowledge of our markets and strong ties with leading multinationals in our sectors. This allows us access to opinions and feedback from the market when making strategic decisions, as well as access to showcasing our portfolio to scouts and Key Opinion Leaders in their fields.
#3 What is the Group’s value proposition to its shareholders and potential investors? What do you think investors may have overlooked about The Trendlines Group?
We believe that our company is undervalued by the market. We hold a diverse portfolio of companies that are valued conservatively, which do not represent their potential exit value. In fact, the exits that we have had to date have consistently demonstrated an average 4x value at exit compared to the value on our books pre-exit.
Source: The Trendlines Group’s November 2022 Business Update
#4 COVID-19 has changed the way companies hire, manage and communicate with their employees. How has the Group adapted to this in the #NewNormal environment we are in today?
Trendlines is headquartered in the north of Israel with an office in Singapore. So even before the pandemic, we were used to using online communications to facilitate teams working together. This type of work intensified during the pandemic. At the start of 2020, we also had a smaller office in Tel Aviv and the Singapore staff were based in two locations. The pandemic brought awareness and digital capabilities that demonstrated that many of the face-to-face meetings which we often travelled for, could be moved online. It made sense to consolidate our office spaces and so from 2022 we only have two main locations – one in Israel and one in Singapore. Our teams are used to functioning remotely and in different time zones, and this has become more seamless over the last two years. If before the pandemic, we would have stated that an employee had to be on site full time, we are more open to hybrid work models.
#5 Why the recent announcement of the strategic transformation plan to shift focus to existing portfolio companies?
The shift of focus to our existing portfolio companies is intended to support the creation of more shareholder value in the short and intermediate term. In parallel, the decision enables us to make budget cuts in our operating costs with a leaner team and to prioritize and sharpen our focus, efforts, and resources to accelerate the rate at which we realize the value of our current portfolio.
Source: The Trendlines Group’s November 2022 Business Update
Editor’s Note: Some answers for this article were extracted from the SGX 10 in 10 series published on 13 December 2022 and have been republished with permission. You can read more on The Trendlines Group on the SGX website.
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