Fintech company Rasan, which is based in Saudi Arabia, intends to sell 30% of its stake during the initial public offering (IPO) of shares in Riyadh.
The implementation of the mentioned intention will make the specified company one of the first fintech sector brands to go public in Saudi Arabia.
At the end of last week, the firm released a statement noting that Rasan and its investors will offer 22.7 million securities in the IPO, including 5.3 million new shares. Bookbuilding for institutional investors will be held from 12 to 16 May. It is also known that retail investors will be able to bid on May 29 and 30.
Last year, the media reported that Rasan had hired Morgan Stanley and Saudi Fransi Capital as joint financial advisers, bookrunners, and underwriters to offer shares. The company’s revenue last year amounted to 256 million riyals ($68 million).
The firm was founded in 2016. The company operates virtual insurance platforms such as Tameeni and Treza. In 2021, Rasan closed an investment round of 90 million riyals. This round was led by the Saudi company Impact46, which specializes in alternative asset management.
Rasan will become the fourth Saudi company to announce an IPO in the last two weeks. Currently, the listings market of this country is on a growth trajectory. In this case, recovery is recorded after a period of short lull.
Saudi medical group Dr. Soliman Abdul Kader Fakeeh Hospital conducted an IPO worth $763 million last week. The shares were sold out within an hour. Also last week, the water treatment company Miahona Co. stopped taking investor orders due to multiple times oversubscribed. Saudi Manpower Solutions Co. at the end of April, announced its listing plans.
It is worth noting that Saudi Arabia has been a busy IPO market for the past two years. In this country, most of the newly listed companies operate outside the technology sector.
At the end of 2021, the food delivery company Jahez raised 1.8 billion riyals in an IPO in a heavily oversubscribed IPO.
In January, the media reported that Rasan was joining other technology companies from Saudi Arabia that were planning an IPO. Tabby, which is a provider of Buy Now, Pay Later services, and online cosmetics retailer Nice One were also mentioned in this context.
Saudi Arabia, like other Gulf countries, is currently trying to diversify its stock exchange beyond the banks and industrial companies that dominated it. Over the past few years, Riyadh has made many efforts aimed at developing the fintech sector, which has already had a positive result. Diversified financial services have increased the budget contribution to the national economy of the country.
Dr. Mohammad Nikkar and Arjun Vir Singh say that Riyadh has yet to solve several difficult tasks on the way to strengthening its status as a global center of financial technology. In their opinion, Saudi Arabia should pay more attention to actions to improve its international positioning. In this case, it means activities to explain to investors and entrepreneurs the advantages of the relevant ecosystem of the country.
The mentioned experts also say that Riyadh should make efforts to develop interstate relations to strengthen the status of an international fintech center. A positive result in this direction will provide companies from Saudi Arabia specializing in financial technologies with access to additional resources necessary for foreign expansion. In this case, it means, among other things, overseas investments.
Dr. Mohammad Nikkar and Arjun Vir Singh say that support for Saudi’s fintech companies should be strengthened by establishing new funding avenues and gaining more accelerators and incubators to stimulate a more dynamic investment climate. Separately, experts noted the problem of costs. According to them, initiatives to reduce the cost of essential technological infrastructure are currently being explored. These efforts are aimed at balancing compliance with local data processing regulations and the need to integrate an advanced application programming interface and the accessibility of information arrays.
Moreover, Dr. Mohammad Nikkara and Arjuna Veer Singh say that Riyadh needs to solve regulatory issues. In this context, they noted that work is underway to simplify the setup and licensing processes. Related efforts are aimed at forming a more navigable regulatory environment for fintech companies. According to experts, further enhancements in this area will support both local and international ventures.
As we have reported earlier, Intel-Backed Astera Seeks $534 Million in IPO.
