In accordance with the International Financial Reporting Standards (IFRS), the book value as at Dec 31, 2024, was around US$67.3 million ($87 million). If a non-IFRS valuation is applied instead, the number should be US$120.4 million. “The reason for this big difference is due to the last transaction value of a start-up company versus what we put onto our books according to IFRS,” says Brosh in an interview with The Edge Singapore.
Food dye, cocoa butter
Brosh, who was appointed CEO in 2023 after serving as CFO, is upbeat that several of the portfolio companies are ready for prime time. Phytolon, which focuses on a broad spectrum of healthy plant-based colours produced via fermentation technology, is set to redefine the global food dye industry, he claims. The catalyst is coming from the US, the world’s largest economy, as artificial food colouring is being phased out during food production and will soon be banned. “This is where the rest of the world will follow suit and Phytolon will stand to dominate the food dye industry,” says Brosh, adding that the global food dye industry is now worth around US$5 billion — and growing.
“For Trendlines, we currently hold a 20% stake in Phytolon, and we cannot imagine how much our stake will be valued in the future. But, I will not quote the value of Phytolon or Trendlines’ stake in the company as everyone can conduct their own evaluation and understand the potential for Phytolon,” he adds.
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Another portfolio company flagged by Brosh is Celleste-Bio, described as an early-stage cocoa innovation company which recently achieved a breakthrough in sustainable cocoa production. Celleste-Bio, in which Trendlines holds more than 20%, recently produced the world’s first chocolate-grade cocoa butter using plant cell culture technology.
“I don’t think we need to emphasise the size of the chocolate market industry today. The fact that we have Mondelez as our partner and shareholder in Celleste-Bio says a lot about the prospect of the startup,” says Brosh, referring to the Nasdaq-listed giant in snacks manufacturing whose portfolio includes household chocolate brands such as Cadbury, Oreo and Toblerone.
According to Mondelez, no other company in the world can produce cocoa butter of the quality comparable to Celleste-Bio. However, he qualifies that an exit plan for Celleste-Bio is still premature, as commercial-scale production is a few years away. “No doubt that the company is progressing well and possesses the ability to scale up, we prefer to wait for Celleste-Bio to become more mature before we look towards an exit for them,” he says.
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Another promising investment is in PregnanTech, which focuses on preventing preterm birth. “Preterm birth is one of the most expensive medical treatments in the world. The cost of having a preterm child during the first year and beyond is huge. At PregnanTech, we had a solution for this medical problem, and the application is simple and easy to use. Again, this is a huge market in the medical space, and we hold a significant stake in the company,” Brosh says.
Peace deal
Headlines out of Israel and the wider Middle East region over the last couple of years have been on the long-running conflict in Gaza. The international community has been trying to get the parties involved to do a peace deal. Brosh maintains that the war affects individuals on a personal level. However, he claims that, on a business level, over the last two years, there has been no significant impact on Trendlines or its portfolio companies.
He points out that some employees of the portfolio companies have been called back to service, but Trendlines helped fill the gaps. “From the investment perspective, despite a minor pullback from investors due to the conflict, the vast majority of the investors continue to invest in our portfolio companies, and these companies were able to raise money as a whole without much disruption.”
“The potential ceasefire, according to many articles out there, is expected to give a big boost to Israel’s start-up industry. In fact, the Israeli government plans to allocate more funds to support these companies. We are hopeful that the ceasefire will be able to create great things for the country, for the people and for Trendlines’ portfolio as well,” Brosh explains.
Potential exits and spinoffs
For Trendlines’ investors, they are, of course, looking for the next exit. According to Borsh, there are now three or four companies in a good position, but he prefers not to name any at this point to ensure that Trendlines can negotiate a good exit offer for these potential candidates.
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Shira Zimmerman, in charge of investor relations and corporate communications at Trendlines, explains that, across the portfolio, things can change dramatically from time to time. “Sometimes it could achieve a breakthrough, or there could be an exit offer on the table for certain companies without prior notice. These surprises come along as well, and therefore we prefer not to list down the companies within the portfolio that could potentially head for the exit in the near term,” she says. Nonetheless, she points out that over the 10 years since Trendlines was listed on the SGX, many of its portfolio companies have matured significantly, making exit deals more viable than they were five or six years ago.
Zimmerman also points out that the nature of these portfolio companies’ businesses often means they face stricter regulations. “Unlike the mobile application or software sector that can commercialise and grow its users exponentially within six months to a year, our portfolio companies in the medical and agrifood industry need some sort of regulatory approval from government bodies such as the US Food and Drug Administration (FDA). The timeline to exit, therefore, is significantly longer,” she says.
Investments and fundraising
To make further investments or to maintain its stakes in the portfolio companies as they raise new funding, Trendlines recently raised nearly $8 million from a rights issue and a private placement at 2.85 cents and 3 cents, respectively. “We need the money to invest either directly or indirectly into our portfolio companies. We have great assets and great companies in our portfolio. We don’t want to be diluted too much during the fundraising period for our respective companies in the portfolio,” says Brosh.
“Therefore, we need the money to invest in our portfolio companies. And if I had more money, I would invest more in them. This is the heart and soul of our business. We need to keep funding these companies, and when the exit time comes, everyone, including our shareholders, will be able to witness the multiplication in our returns,” Brosh explains.
Given the valuation gap between Trendlines’ market capitalisation and its portfolio valuation, Brosh admits that Trendlines will have to prove to investors that it can score a big exit at the end of the day.
“Once we prove that, we are confident that the market will appreciate us and give us the valuation that we should be getting. We are putting more effort into investor relations work these days. We are speaking to various current or potential shareholders across different regions, such as Singapore, the US and Europe, to explain to them the real value in Trendlines,” he says.
“At the same time, we are listening to our shareholders as well. We do not ignore them and we take their feedback and comments seriously. One issue shareholders stressed was our operating costs, and we are proud to say we reduced them by 60% from 2022 to 2025. Therefore, by listening to our shareholders, we would like to gain their trust and that will bring value to us as well,” Brosh says.
