Riyadh-based fintech startup, Erad, has obtained $125 million credit facility headed by global investment bank Jefferies, along with co-investment from Channel Capital, enabling Jefferies’ first-largest Gulf Cooperation Council (GCC) asset-backed SME financing agreement.
Erad provides Sharia-compliant working-capital solutions, which were established in 2022, for small and medium enterprises (SMEs).
Recently, the company has extended its significance to the fields like manufacturing, logistics, distribution, and real estate services, offering financing packages for ticket sizes up to SR 10 million.
As of new funding arena, Erad plans to enhance embedded-finance offerings at the point of sale, deepen collaborations with suppliers and B2B platforms, and expand throughout the GCC.
The firm stated that it had processed over SR 250 million for SMEs to date and achieved six-fold year-over-year growth.
The Erad co-founders, the facility will enhance rapid access to working capital through current supply-chain networks, which effectively makes financing as simple as a payment transaction. This model intends to address the financing gap, which often hampers SME growth in the region.
Managing Director at Jefferies, Mark Collier, said, “We are proud to work with erad and the Channel team on one of our first asset-backed financing solutions in the GCC, and our partnership with erad represents a significant step forward in creating seamless access to capital for GCC SMEs, which we think erad are uniquely well positioned to provide. The combination of erad’s proprietary technology platform with our global experience in asset-backed financing solutions will enable erad to address the real-time working capital needs of SMEs across the region.”
The agreement comes after a $16 million pre-Series A round ended by Erad earlier this year, supported by well-known investors, such as Y Combinator, Nuwa Capital, Khwarizmi Ventures, and others, signifying growing investor confidence in fintech-driven SME financing solutions.
