Fundraising startups continue to raise funds in MENA, where the brand only operates

In a time when it has become difficult to raise business capital, many companies have turned to non-dilutive, revenue-based financing (RBF) as an alternative. As a result, many initiatives have sprung up to address the problem, none more so than in the MENA region, which has taken to the example like a duck to water. The latest is CredibleX images which has raised a total of $55 million for a seed drive led by Abu Dhabi Other Ventures to take advantage of the rapidly growing investment market in the Middle East.

Providing operational financing to small and medium-sized businesses, CredibleX operates in a market where we have seen companies like MENA competitors FlapKap and Flow48. growth and capital raising in 2023not to mention others such as Modifi (raised $353.6 million to date), Drip Capital ($528.1 million to date), and Incomlend ($25 million to date).

So what is going on here?

With MENA SMEs (small/medium enterprises) still finding it difficult to access working capital from traditional banks, CredibleX has found a way to go to market. It connects with large integrators and then follows SMEs in their verticals.

CEO and co-founder Anand Nagaraj told TechCrunch: “We believe that this process makes it easier for us to process refunds because we have a direct relationship with the borrower/payer. Most of the others in this area work with SMEs trying to get the refunds/sales distributed.”

In particular, debt financing works well for SMEs in high-income countries such as the UAE, and similar countries, because it is difficult to get funding from so-called Development Finance Institutions, which are set up to sell small projects. economically developed countries.

The way the platform works is the “MENA region,” due to the explosion of platforms designed for service industries such as restaurants, which are millions in MENA.

Here’s an example: SMEs like restaurants use platforms like Talabat (found and Delivery Hero in 2015 for $158.52 million) to deliver its food, and wants to acquire RBF. It involves debt through The Talabat platform integrated with CredibleX, uploads its sales history/ratings, then CredibleX makes a decision to grant a loan, all within 24 hours.

The restaurant repays the loan if Talabat pays directly to CredibleX (which also has similar relationships with 37 other partners).

The company started operations in March 2024 and is said to have provided more than AED 100 million (US$ 27 million) to SMEs.

Nagaraj previously worked at Citi, then founded Invoice Bazaar, a financing platform for SMEs that provides large companies with initial payments. After exiting in 2021, Nagaraj, along with co-founders Ahmad Malik and Hassan Reda, founded CredibleX.

Nagaraj explained: “Our system allows us to access a large pool of SMEs and helps when things are difficult, in terms of getting returns from SMEs.” CredibleX is also fully regulated by the FSRA in Abu Dhabi Global Markets.

The seed round is made up of funding from Further Ventures and loans from various backers, including Kilgour Williams Capital. Also Ventures have their own LPs including ADQ and Mastercard.