Listed on the Toronto Stock Exchange, software company Kneat closed an equity financing offering that exceeded expectations.
Irish-founded software company Kneat last week sold more than 6.7m common shares at a price of C$3 each, closing more than C$20m in financing.
Founded in Ireland, Kneat underwent a reverse takeover from Canadian company Fortune Bay in 2016. The deal saw Kneat listed on the Toronto Stock Exchange but operational headquarters remained in Limerick and co-founder Eddie Ryan continued in his role as CEO.
In early April, the company announced its intention to raise around C$17.5m in a public offering agreed with a syndicate of investment dealers led by Cormark Securities. The final offering saw CIBC World Markets join as a co-lead and the full syndicate of underwriters included Eight Capital and Echelon Wealth Partners.
In total, the offering raised C$20,125,575 in public equity financing for Kneat. A concurrent non-brokered placement of 666,668 common shares at the same issue price raised a further C$2m.
Growing in Limerick
Kneat’s software centres on digitising and automating validation processes for life sciences companies. The company claims to have seven of the world’s top 10 biopharma companies among its client base.
Its SaaS platform saw significant growth in 2020 driven by the sector’s accelerated digital transformation under the pressure of the Covid-19 pandemic. As companies moved away from paper-based processes to ensure business could continue with the mass shift to remote working, Kneat saw annual recurring revenue from its SaaS business alone more than double.
The company’s revenue grew by 88pc in 2020, reaching C$7.42m. Total SaaS revenues were almost two and a half times the previous year, jumping from C$840,000 in 2019 to C$2.88m in 2020. Losses at the company also narrowed by 8pc year on year.
According to the Irish Times, Kneat currently employs 160 people in Ireland and CEO Ryan expects to see further growth at the company in 2021. “Everything we do is managed from Limerick and the plan is to grow operations there further,” he told the publication.
Net proceeds from this recent offering will support these growth initiatives and provide working capital for the company.