Riyadh-based fintech erad has secured a $33 million debt financing deal, led by India’s Stride Ventures, to fuel its expansion across Saudi Arabia and the UAE. The deal, announced at the Money20/20 conference in Riyadh, marks Stride Ventures’ first major investment in the Kingdom’s fintech sector.
Addressing a Critical Need
erad, founded in 2022, specializes in providing Shariah-compliant alternative financing solutions for small and medium-sized enterprises (SMEs). This new capital will be used to meet the growing demand for flexible and fast financing options in the GCC, with the company aiming to help close the region’s estimated $250 billion SME credit gap.
Since its launch, erad has already deployed over $50 million in financing to regional SMEs, with funding requests from well-known Saudi and Emirati brands exceeding $532 million.
A Data-Driven Approach
What sets erad apart is its proprietary, data-driven platform. It uses sophisticated data modeling to assess risk and creditworthiness, allowing it to approve financing in as little as 48 hours. This speed is a huge advantage for businesses in sectors like retail, food and beverage, healthcare, and e-commerce that need quick access to capital to scale.
The recent funding follows a strong period of growth for the company, which reported a 5x year-on-year growth. According to erad’s co-founder, Salem Abu-Hammour, this investment is crucial for their mission to provide accessible capital, as “access to capital remains one of the primary challenges for SMEs across the region.”
A Strategic Partnership
For Stride Ventures, the investment in erad represents a strategic entry into the Gulf’s private credit market, an asset class they believe is largely untapped. Fariha Ansari Javed, a partner at Stride Ventures, noted that the partnership allows them to provide innovative, alternative financing solutions that align with the growth ambitions of startups and SMEs without requiring them to dilute equity. This investment is part of a larger plan by Stride Ventures to deploy a total of $200 million in Saudi Arabia over the next two years.
