Saudi Arabia’s embedded-finance platform Erad has secured a USD 125 million scalable facility led by Jefferies, with co-investment from Channel Capital. The transaction marks Jefferies’ first major asset-backed SME financing deal in the GCC. It strengthens its strategic presence in the Kingdom.
Founded in 2022 in Riyadh by Salem Abu-Hammour, Faris Yaghmour, Abdulmalik Almeheini and Youssef Said, Erad enables SMEs to access Sharia-compliant working-capital solutions. The company is now expanding into manufacturing, logistics, distribution and real-estate services. Their ticket sizes are now reaching up to SAR 10 million.
A Major Boost for Embedded Finance
With the new facility, Erad will expand embedded financing directly at point of sale. This will deepen its partnerships with suppliers and B2B platforms. The platform plans to scale across the GCC, building on six-fold year-over-year growth. It has over SAR 250 million processed for SMEs so far. Funding allocated to Saudi SMEs will be channelled through CMA-licensed direct financing funds managed by Erad Partners Capital.
Co-founder Salem Abu-Hammour said the partnership marks a turning point for SME financing in the region. He noted that embedding capital solutions within supplier ecosystems makes working capital as simple and immediate as a payment transaction. He added that strong regulatory support and participation from Jefferies and Channel Capital highlight the strategic role of alternative finance in advancing the Kingdom’s SME ambitions.
Addressing the GCC’s USD 250 Billion SME Credit Gap
SMEs form nearly half of the GCC’s GDP and employ two-thirds of the workforce. Yet they face an estimated USD 250 billion financing gap that constrains growth. Erad aims to close part of this gap through its technology-led model that delivers fast, Sharia-compliant capital.
Mark Collier, Managing Director at Jefferies, said the collaboration showcases the firm’s commitment to building seamless capital access for regional SMEs. He highlighted the synergy between Jefferies’ global expertise in asset-backed financing and Erad’s proprietary technology, enabling real-time working-capital solutions.
Johan Nisser, CIO at Channel, said the deal continues Channel’s seven-year journey providing Sharia-compliant financing across the GCC. He added that the partnership represents a strong entry into the Saudi market and supports Erad’s mission to power regional businesses.
Expanding Products and Partnerships
Following the transaction, Erad will broaden its range of embedded finance products, allowing suppliers and business platforms to offer integrated financing at checkout. The model is already active with partners in healthcare and food and beverage across Saudi Arabia and the UAE.
The new deal builds on Erad’s recent USD 33 million debt round led by Stride Ventures. Since launch, the company has processed more than SAR 250 million in SME financing with a 48-hour approval model, positioning it as a key player in tackling the region’s SME funding gap.