Saudi SME Lender erad Scores $22M Series A to Fuel Gulf Expansion

Saudi SME financing platform erad has pulled in USD 22 million, or about SAR 78.7 million, in a Series A round as it looks to widen its reach across the Gulf. The round was led by Middle East Venture Partners, with backing from 500 Global, SVC, S60 Ventures, ANB Capital, Conjunction Capital and Araya Ventures. Khwarizmi Ventures, Nuwa Capital, Aljazira Capital, Oraseya Capital and Joa Capital also joined in.

The fresh capital is meant to help erad expand its financing products, strengthen its technology and grow its regional team as it scales SME financing operations across the GCC. In plain terms, it is trying to do more of what many small businesses in the region still struggle to get from traditional channels: working capital, and quickly.

That matters because small and medium-sized businesses are not some side story in the Gulf economy. According to the company’s framing, SMEs make up roughly half of regional GDP and employ around two-thirds of the workforce across the GCC, yet many still run into a stubborn financing gap. It is a bit of a faff, frankly, because these are often the very businesses expected to push private-sector growth.

Founded in 2022 by Salem Abu-Hammour, Faris Yaghmour, Abdulmalik Almeheini and Youssef Said, erad offers Shariah-compliant working capital solutions to SMEs in Saudi Arabia and the UAE. The platform started with a narrower focus but has since moved into serving companies across logistics, manufacturing, wholesale, retail and healthcare, among other sectors. It uses technology-based underwriting to review financing needs and process applications faster.

One comment linked to the announcement put the scale of the challenge quite neatly: “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.” That is really the nub of it. Governments across the Gulf want more diversified economies, less dependence on legacy sectors, and a stronger private sector. But without access to capital, that ambition can feel a little like putting the cart before the horse.

erad seems to think the next phase lies in going deeper into more capital-hungry sectors. Another statement tied to the news said, “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.” The company’s near-term focus includes industrial, logistics and manufacturing businesses, where financing needs can rise sharply as firms build inventory, expand fleets, increase output or take on larger contracts.

And believe it or not, the demand already looks much bigger than the capital deployed so far. erad says it has received more than SAR 4 billion in financing requests, compared with over SAR 500 million in cumulative financing provided to date. That gap is telling. I reckon it says as much about unmet demand in the market as it does about erad’s own momentum.

For readers at Arageek who follow the startup space closely, this is the kind of update that feels spot on for the region’s broader shift. I still remember hearing founders in Saudi and the UAE say that raising equity can be hard, but securing day-to-day growth capital can be even trickeir. On the flip side, alternative lenders also have to prove they can scale responsibly, especially in sectors where the cost of getting underwriting wrong is steep.

Still, this round puts erad in a strong position heading into its next chapter. The company plans to keep developing new financing products tailored to the sectors it wants to serve, while also building out its technology and commercial teams. If it can match faster approvals with Shariah-compliant structures and disciplined risk assessment, it may carve out a bigger role in the GCC’s growing fintech ecosystem. That said, execution is the whole ball game.

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