Iot squared, a joint venture between Saudi Telecom Company and the Public Investment Fund, has signed a binding agreement to acquire 100 per cent of technology company Machinestalk, which focuses on Internet of Things, amid the kingdom's digital transformation push.
The deal will add value for iot squared through Riyadh-based Machinestalk’s field services capabilities, technology, proprietary IoT platforms, internal development capabilities, local and international partner and customer relationships, the Saudi Press Agency reported on Sunday.
The agreement "steers to an exciting new chapter in our growth story", Othman Al Dahash, chief executive of iot squared, said.
"As we continue to strengthen our position as the national IoT champion... we are eager to play a pivotal role in supporting Saudi Arabia’s ambitions to lead the region’s digital transformation and adoption of emerging technologies."
Both stc and PIF own a 50 per cent stake each in iot squared, which offers smart solutions in sectors including industrial manufacturing, logistics, transportation and smart cities.
The company aims to make Saudi a regional technology centre for the Middle East and North Africa and become a “one-stop-shop” for IoT solutions.
One of the world’s largest sovereign wealth funds, the PIF is at the centre of the Saudi Vision 2030 initiative to diversify the country’s economy from hydrocarbons.
Its assets under management grew 13 per cent annually to about $600 billion last year. The fund established 25 companies last year and created 181,000 jobs.
It also made international investments worth $136.5 billion, with a growing focus on growing its domestic assets.
As part of its mandate, the fund aims to localise technology and knowledge in Saudi Arabia and develop a digital economy, in line with the Vision 2030 objectives.
Saudi Arabia's IoT market is estimated to reach 10.8 billion Saudi riyals ($2.9 billion) by 2025 at an annual growth rate of 12.8 per cent, according to Massachusetts-based researcher International Data Corporation.
Machinestalk is one of the largest Saudi companies in the IoT domain, founded in 2015 as a subsidiary of NOMD Holding.
It has delivered diversified solutions focused on smart mobility, with additional capabilities in smart buildings and facilities, smart cities, and industrial IoT.
The acquisition represents "an important milestone in the collaboration between PIF and stc as this reflects the major investment strategy in the products and services in ICT industry, including investments in digital clouds, cybersecurity, FinTech and digital entertainment", SPA said.
The iot squared deal is subject to regulatory approvals and fulfilling transaction conditions.