KnowledgeNet starts book-building process, qualified investors’ subscription at SAR 35-40 a share

Logo of Knowledge Net Co.

KnowledgeNet Co. started today, Feb. 26, the book-building process and the qualified investors’ subscription to list 700,000 shares, or 20% of capital, on Nomu-Parallel Market at a price range of SAR 35-40 a share.

The book-building process for qualified investors will run from Feb. 26 until March 2.

The Capital Market Authority (CMA) approved, in December 2022, the company’s application on the planned initial public offering (IPO).

KnowledgeNet was established in 2000 as a limited liability company with a capital of SAR 500,000. In 2021, the firm converted into a closed joint-stock company, with its current capital at SAR 35 million.

The company is engaged in the wholesale of computers and their accessories (including the sale of printers and inks), software, as well as computer-integrated systems design. Its operations cater for over 45 clients in the financial sector across the Kingdom, UAE, Oman and Egypt.

Company Profile
Company	KnowledgeNet Co.
Market	Nomu-Parallel Market
Core Activities	Wholesale of computers and accessories as well as software
Capital	SAR 35 mln
Total Shares	3.5 mln

IPO Summary
Issue Percentage	20%
Offered Shares	700,000
Minimum Limit	10 shares
Maximum Limit	174,999 shares
Subscription Period	From Feb. 26 to March 2, 2023
Final Allocation	March 7, 2023
Refund (if any)	March 9, 2023

KnowledgeNet's vision is aimed at the localization of the software sector in the region's markets, along with the exporting of the company’s products and services. This is through two main axes, the first of which is its products that constitute three main ventures.

The first is the TradeNet integrated order management system that automats the full cycle from order capture to settlement.

The second is Datability, which is a specialized, tech-independent portal and data solutions provider, mostly focusing on the banking sector. Lastly is Softmore, which is a cloud development platform designed to build enterprise solutions for KnowledgeNet and other companies.

The second axis is the strategic projects, represented in two types, the first of which is projects providing technical consulting or highly experienced and specialized consultants to clients. The second type is partnership projects with the private or public sectors through capital contribution.

KnowledgeNet’s Subsidiaries
Subsidiary	Details
Real Estate KnowledgeNet Co. Ltd.	A 50% owned unit located in Riyadh, with SAR 100,000 in capital. The company’s portfolio comprises the management and leasing of owned or leased residential and non-residential real estate. Operates in 3D printing, software development, artificial intelligence (AI) technology and fintech solutions. PropertyNet Cloud program allows services of registration of lease contracts and other related invoicing services.
KnowledgeNet for Business Services Co.	A wholly-owned unit located in Riyadh, capitalized at SAR 100,000. It operates in systems analysis, design and programming of special software in addition to the biotechnology solutions and senior management consulting services. The company also provides consultancy services to the Saudi Central Bank (SAMA).
Technical Solutions Company for Financial Technology Ltd.	A 99.99% owned firm located in Riyadh with SAR 1 million in capital. It operates in system analysis, software development, user interface and application development. The company seeks partnerships with fntech firms and the acquisition of 7-10% stakes using the Softmore license.
Softmore Co.	A free-zone limited liability firm located in Ras Al Khaimah, UAE, with AED 100,000 in capital. It trades in computer supplies, data processing, computer systems and programs.
VeCentral Holdings Co. Ltd.	A private company limited by shares headquartered in Abu Dhabi, UAE, with $1,000 in capital. It is 45% owned by KnowledgeNet. It operates in information technology and special software, in addition to developing programs for startups. It sets up and operates fintech projects, in line with market needs.
Daftar Information Technology Co.	A limited liability company, headquartered in Riyadh with SAR 50,000 in capital. It is a 7.5% owned unit. It is a fintech startup, operating under Softmore license. It offers BNPL services to consumers.
PropertyNet Co.	A limited liability company, headquartered in Ras Al Khaimah, UAE, with AED 100,000 in capital. It is a 50%-owned unit. It operates in computer systems and accessories.

This came in addition to the company’s fintech investments via partnerships with entrepreneurs. In its prospectus, KnowledgeNet pointed to obtaining a trademark registration certificate for Blinq Fintech.

KnowledgeNet reported total revenue of nearly SAR 30.3 million in H1 2022, while net income reached approximately SAR 4.27 million in a year-earlier period.

Revenue by Segment (SAR mln)
Segment	2020	2021	June 2022
Government Payments	26.47	30.38	17.29
Banking Maintenance & Technical Support	12.74	9.03	7.09
Program Licensing to Banking Segment	6.70	9.60	5.94
Total	45.91	49.02	30.31
Total Income	18.9	14.9	9.9
Net Income	7.6	1.6	4.3
Net Profit Margin	17%	3%	14%

Revenue from the Saudi market reached nearly SAR 27.4 million over the first six months of 2022, accounting for 90% of total revenue across all markets. Revenue from the UAE operations stood at approximately SAR 2.9 million, representing 10% of total revenue.

Revenue by Market
Market	2020	2021	June 2022
Saudi Arabia	85%	93%	90%
External Markets	15%	7%	10%

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