Saudi Arabia based SME financing platform erad raised USD 22 million (SAR 78.7M) in a Series A round. The round was led by Middle East Venture Partners (MEVP). The round saw particpation from 500 Global, SVC, S60 Ventures, ANB Capital, Conjunction Capital, and Araya Ventures. It also saw participation from Khwarizmi Ventures, Nuwa Capital, Aljazira Capital, Oraseya Capital, and Joa Capital.

The funding will support the expansion of erad’s financing products, technology, and regional team as the company grows its SME financing operations across the GCC. 

Why You Should Care

SMEs account for a significant share of economic activity across the GCC, but access to working capital remains a constraint for businesses looking to expand. erad’s latest round comes against this broader financing gap.

“SMEs represent approximately 50% of regional GDP and employ two-thirds of the workforce across the GCC, yet face a financing gap that limits their growth,”

Salem Abu-Hammour, Co-founder of erad.

The funding also points to the growing role of alternative financing platforms in supporting businesses that need capital for expansion. erad has moved beyond its initial focus to serve companies across logistics, manufacturing, wholesale, retail, healthcare, and other sectors. This is alongside using technology to assess financing needs and process applications.

For the GCC, erad’s expansion comes as governments across the region seek to grow the private sector and diversify economies beyond traditional industries. Financing platforms that can provide working capital to SMEs are therefore part of the wider infrastructure supporting that shift.

The Details

Founded in 2022 by Salem Abu-Hammour, Faris Yaghmour, Abdulmalik Almeheini, and Youssef Said, erad is an alternative financing platform for SMEs. It provides Shariah compliant working capital solutions to SMEs in Saudi Arabia and the UAE.

“What excites me most is where we go from here which is deeper into new sectors, into new products that did not exist before, and powering the businesses that are scaling across the region,”

Salem Abu-Hammour, Co-founder of erad

Looking ahead, with the funding, erad aims to continue developing its new financing product seeking to meet demand. It aims to tailor these products to the sectors it seeks to expand into, This includes industrial, logistics, manufacturing, and capital-intensive industries,It also plans to expand its team across technology and commercial functions.

The Ripple

erad’s expansion comes as financing demand from SMEs continues to exceed the amount of capital the company has deployed. The more than SAR 4 billion in financing requests received by the platform compares with over SAR 500 million in cumulative financing provided to date.

Its focus on industrial, logistics, and manufacturing businesses could also broaden its role beyond traditional SME financing. These sectors can require significant amounts of working capital as companies increase production, expand fleets, build inventory, or take on larger commercial contracts.

The raise adds another financing platform to the GCC’s growing technology ecosystem, with erad positioning its model around faster approvals, Shariah compliant products, and technology based underwriting. 

What to Watch

erad’s next phase will focus on expanding its financing products, entering additional sectors, and growing its team across technology and commercial functions.

The company’s expansion into industrial, logistics, and manufacturing will be a key area to follow as it develops new financing products for businesses in these sectors. Its ability to scale these offerings alongside its existing operations will shape the next stage of erad’s growth across the GCC