Riyadh-based embedded finance platform erad has secured a $125 million scalable credit facility led by global investment firm Jefferies, with co-investment from Channel Capital. This landmark deal marks Jefferies’ first major GCC asset-backed SME financing transaction and will significantly bolster erad’s mission to support small and medium-sized enterprises across the region.
Fueling Regional Expansion and Embedded Finance
The new facility will enable erad to accelerate its expansion across the GCC and scale its embedded finance solutions, allowing suppliers and B2B platforms to offer integrated financing at the point of sale. This move builds on the company’s impressive six-fold year-over-year growth and over SAR 250 million processed for SMEs to date.
With this capital, erad is expanding its Sharia-compliant working capital solutions into new sectors, including manufacturing, logistics, distribution, and real estate services, offering financing with ticket sizes of up to SAR 10 million. Funds allocated for Saudi SMEs will be deployed through direct financing funds licensed by the Capital Market Authority (CMA) and managed by Erad Partners Capital.
Addressing a $250 Billion SME Credit Gap
SMEs are a critical pillar of the GCC’s economic diversification strategy, yet they face a staggering $250 billion financing gap that hinders their growth potential. Erad aims to close this gap by providing rapid and accessible capital, with an approval process that takes less than 48 hours.
Salem Abu-Hammour, Co-founder of erad, said, “Our partnership with Jefferies represents a transformative moment for SME financing in the region. By embedding financing directly into existing supplier and platform relationships, we’re making working capital as accessible as a payment transaction. The support from the regulators, Jefferies and Channel Capital, demonstrates the strategic importance of alternative finance in supporting the Kingdom’s goal of SME growth.”
Mark Collier, Managing Director at Jefferies, added, “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.”
Johan Nisser, CIO at Channel Capital, commented, “Channel is proud to team up with the Erad Team, Jefferies and other stakeholders involved in this transaction, our first in KSA and a continuation of our seven years of sharia-compliant asset-backed finance in the GCC region. We are excited to support the aspirations of Erad in powering businesses across the middle east region in this inaugural ABS financing.”
About erad
Founded in 2022 by Salem Abu-Hammour, Faris Yaghmour, Abdulmalik Almeheini, and Youssef Said, erad is a Riyadh-headquartered alternative financing platform focused on small and medium-sized enterprises (SMEs). The company provides Sharia-compliant, embedded working capital solutions to help businesses grow. Since its launch, erad has processed over SAR 250 million in financing and is backed by prominent investors including Y Combinator, Nuwa Capital, Khwarizmi Ventures, and Aljazira Capital.
Source: Wamda
