- Funding round led by YCombinator, Nuwa Capital and Khwarizmi Ventures to bridge the substantial credit gap confronting SMEs in the GCC
- Startup developed a proprietary, data-driven financing platform that offers Shariah-compliant working capital solutions tailored specifically for revenue-generating SMEs.
Riyadh-headquartered alternative financing platform for SMEs – erad – has raised $16 million [SAR 60 million] in a Pre-Series A round to accelerate its growth and expand its operations in Saudi Arabia and beyond.
The funding round was backed by prominent global and regional investors such as YCombinator, Nuwa Capital, and Khwarizmi Ventures, erad is strategically positioned to accelerate its growth trajectory and expand its operational footprint.
The infusion of capital is not only a testament to the company’s innovative approach but also highlights the pressing need to bridge the substantial credit gap confronting SMEs in the GCC.
SMEs constitute the backbone of the GCC economy, contributing significantly to employment, innovation, and overall economic diversification.
Chronic challenges
Despite their vital role, these enterprises face chronic challenges in accessing formal capital, with an estimated $250 billion credit gap stifling their potential for scale and growth.
Recognising this critical barrier, erad has developed a proprietary, data-driven financing platform that offers Shariah-compliant working capital solutions tailored specifically for revenue-generating SMEs.
The company’s commitment to providing rapid and flexible financing—often within 48 hours—addresses a long-standing market inefficiency, empowering businesses across sectors such as retail, food and beverage, healthcare, and e-commerce.
Supporting entrepreneurial growth
Salem Abu-Hammour, co-founder of erad, said the transformative impact of accessible financing on SMEs, particularly noting that over 60 per cent of erad’s clientele are first-time credit takers.
“This highlights erad’s role in fostering financial inclusion and supporting entrepreneurial growth in markets where traditional credit options may be limited or inaccessible due to regulatory or cultural constraints.”
By partnering closely with both emerging and established businesses, including notable names such as Citron, Wixsana, and House of Pops, erad helps unlock economic value and resilience within the SME sector.
Since its inception, erad has successfully disbursed more than SAR100 million ($26.6 million) to hundreds of businesses in Saudi Arabia and the UAE.
The overwhelming demand for its alternative financing solutions—evidenced by over SAR2 billion ($532 million) in funding requests—underscores the critical role that innovative platforms like erad play in addressing the financing void in the region.
The company’s ability to combine technological sophistication with adherence to Shariah principles positions it uniquely in the marketplace, appealing to a broad base of entrepreneurs seeking ethical and compliant financial services.
Looking ahead, erad plans to leverage the new capital to deepen its penetration in the Saudi market, enhance its product portfolio, and accelerate local hiring efforts across diverse functions.
The strategic expansion aligns well with the Kingdom’s Vision 2030 objectives, which emphasize increasing SME participation in the national economy as a means to drive sustainable development and economic diversification.
Through its commitment to financial accessibility and innovative service delivery, erad exemplifies how fintech solutions can act as catalysts for inclusive growth, supporting vital sectors and enabling SMEs to thrive in an increasingly competitive economic landscape.