Limerick-based software company Kneat secures €14.9m in financing

Kneat, an Irish company that provides software for the life sciences, healthcare and other heavily regulated industries, has secured 22 million Canadian dollars (€14.9 million) in financing.

Founded by Eddie Ryan, Kevin Fitzgerald and Brian Ahearne in Limerick in 2006, Kneat is now officially a Canadian company after a reverse takeover in 2015 that led to a listing on the Toronto Stock Exchange. However, its operational headquarters remain here with many of its 160 employees also based locally.

The company has developed cloud-based software that ends paperless validation processes by digitising them. It is used by most of the leading global life sciences companies, including Biogen.

Kneat last week sold a total of 6,708,525 common shares in the company at a price of C$3 in a C$20.1 million offering. It also completed a private placement of 666,668 common shares of the company at the issue price to secure a further C$2 million.

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Ongoing hiring

Mr Ryan, the company’s chief executive, said Kneat intended to use the proceeds for growth initiatives and working capital.

“We’ve basically been hiring on an ongoing basis since 2016 and [with] the financing and as we scale, we’ll be looking to add more people,” he said.

The fresh financing comes just over a year after Kneat secured C$14.5 million through a similar offering.

The company signed a new lease to occupy 12,700sq ft at Hawthorn House, further expanding its head office footprint within the National Technology Park in Limerick last year.

“Everything we do is managed from Limerick and the plan is to grow operations there further,” said Mr Ryan.

“We took advantage of the good climate to raise the money to strengthen our balance sheet and accelerate our overall strategy,’ he added.

Covid growth

Kneat recorded revenues of C$7.42 million in 2020, up 88 per cent year-on-year as losses fell 8 per cent to C$5.69 million.

Annual recurring revenue (ARR) which includes software-as-a-service (SaaS) licence fees and maintenance fees was C$4.76 million, more than double the C$1.91 million of a year earlier.

Mr Ryan said the company had experienced significant growth during the Covid crisis as it assisted clients who were experiencing challenges around the performance of their on-premises applications.

“Businesses have been forced to rapidly adapt, with many looking towards Kneat to displace labour-intensive, paper-based processes while also enabling normal business operations to continue under conditions of remote-working and contamination control.”