erad, a Riyadh-based company specializing in alternative financing for small and medium-sized enterprises, announced that it had raised $22 million in a Series A funding round, equivalent to SAR 78.75 million. The round was led by MEVP, with participation from new investors 500 Global, Saudi Venture Capital, S60 Ventures, ANB Capital, Conjunction Capital, and Araya Ventures, alongside existing investors Khwarizmi Ventures, Nuwa Capital, Aljazira Capital, Oraseya Capital, and Joa Capital.
Founded in 2022 by Salem Abu-Hammour, Faris Yaghmour, Abdulmalik Almeheini, and Youssef Said, erad provides small and medium-sized enterprises in Saudi Arabia and the UAE with Sharia-compliant working capital financing of up to SAR 10 million. The platform relies on data and artificial intelligence models to assess companies, issuing approvals within an average of 48 hours.
How will erad use the funding?
The company plans to direct the round’s proceeds toward developing new financing products, expanding across the Gulf Cooperation Council countries, and growing its technology and commercial teams. Part of the expansion will focus on capital-intensive sectors, including industry, logistics, and manufacturing, in addition to sectors the company currently serves, such as medical equipment and wholesale distribution.
erad said it achieved eightfold year-on-year growth in Saudi Arabia and distributed more than SAR 500 million, or approximately $133 million, in cumulative financing to small and medium-sized enterprises. It also received financing applications worth more than SAR 4 billion, reflecting the scale of demand targeted by the platform, although these applications do not necessarily represent executed financing.
What changes in practice for companies?
erad offers several working capital products, and the financing can be used to expand fleets, purchase inventory, open new locations, and execute larger contracts, with flexible repayment terms available according to the announcement. The company says its proprietary models help it track cash flows, process larger volumes and higher financing amounts, and manage credit risk.
erad says that 85% of its customers continue to grow with the company and expand their financing during the first year. The company also secured an expandable $125 million financing facility in November 2025 led by Jefferies, indicating that the new round comes alongside funding sources designated to support lending operations, rather than serving as the sole source of liquidity.
Why does this news matter?
The round is significant because it gives erad greater capacity to expand a financing model targeting the SME funding gap in the Gulf, while combining automated data assessment with Sharia-compliant financing. However, expansion into more capital-intensive industrial, logistics, and manufacturing sectors will put the company’s ability to control credit and liquidity risks to a greater test. The source does not provide details about the performance of the new products or financing terms, so these elements will require further monitoring as the company moves from growth in its core market to broader regional expansion.