Saudi fintech Erad raises $16 million pre-Sequence A to develop its revenue-based financing platform 

Riyadh-headquartered fintech Erad has raised $16 million (SAR 60 million) in a Pre-Sequence A funding spherical to speed up its development and broaden operations in Saudi Arabia and the UAE, it introduced in the present day. The funding was backed by a mixture of world and regional buyers together with Y Combinator, Nuwa Capital, Khwarizmi Ventures, Aljazira Capital, VentureSouq, Oraseya Capital, and Joa Capital.

It’s unclear whether or not the spherical included any debt, we’ve reached out to Erad’s workforce and can replace the story if we hear again. The Saudi startup beforehand raised $2.4 million in a pre-seed spherical in 2022 from Nuwa Capital, VentureSouq, and Khwarizmi Ventures.

Based in 2022 by Salem Abu-Hammour, Faris Yaghmour, Abdulmalik Almeheini, and Youssef Stated, Erad offers revenue-based and fixed-term financing options to SMEs via its data-driven platform. The startup guarantees financing choices inside 48 hours, with funding quantities starting from $40,000 to $2.7 million (AED 150,000 to AED 10 million), focusing on companies in retail, F&B, e-commerce, healthcare, and different sectors.

In line with its web site, Erad serves companies working within the UAE or Saudi Arabia with at the very least six months of operational historical past and month-to-month revenues of round $41,000.

The platform makes use of proprietary information fashions to evaluate enterprise efficiency by securely connecting to gross sales, advertising, accounting, and banking instruments that SMEs already use. It claims to have deployed over $26.6 million (SAR 100 million) in funding to lots of of companies throughout Saudi Arabia and the UAE since its launch.

Salem Abu-Hammour, co-founder of Erad, in an announcement, mentioned, “Whereas SMEs proceed to energy the GCC financial system, entrepreneurs in retail, F&B, healthcare, and past wrestle to safe the capital they should scale up. Over 60% of our prospects are first-time credit score takers and we’re proud to be companions of their development whereas fostering monetary inclusion.”

The financing platform serves companies which were operational for at the very least six months and generate month-to-month income of $40,000 (AED 150,000) or extra. Its prospects embody well-recognized regional companies like Citron, Wixsana, Home of Pops, Joi Items, eZhire, Udrive, and Makan, amongst others.

The platform’s Shariah-compliant financing adheres to rules of Tawaruq, providing each revenue-based financing (the place companies repay a small proportion of their income) and fixed-term financing (with mounted month-to-month installments).

With this new funding, Erad plans to deepen its market presence in Saudi Arabia, specializing in increasing its native workforce and enhancing its product choices. The funding spherical and growth come at a time when the platform has recorded over $532 million (SAR 2 billion) in funding requests, highlighting the numerous demand for various SME financing within the area.

Flow48, one other notable participant within the house led by Fetchr founder Idriss Al Rifai, raised $69 million in a Sequence A spherical comprising each debt and fairness in February.

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