In an era where it's increasingly difficult to raise venture capital, many companies are unsullied; They are turning to Revenue-Based Financing (RBF) as an alternative. As a result, Many startups have risen to meet that challenge. Nowhere is the MENA region taking to the model like a duck. The last one CredibleX Raised $55 million in seed funding led by Abu Dhabi. More adventures To take advantage of the growing market for income financing in the Middle East.
By providing capital financing to small and medium-sized businesses, CredibleX operates in a market where we've seen companies such as MENA rivals FlapKap and Flow48. Increase scale and capital by 2023.Modifi ($353.6 million to date); Not to mention other places like Drip Capital ($528.1 million to date) and IncomLend ($25 million to date).
So what's going on here?
As MENA SMEs (small/medium enterprises) still find it difficult to access working capital through traditional banking channels, CredibleX has discovered a marketing channel. It also goes after SMEs in their vertical ecosystems, partnering with large conglomerates.
CEO and co-founder Anand Nagaraj told TechCrunch, “We believe this approach helps us get easy repayments because we have a direct relationship with the debtor/payer. Most others in this space try to take on the receivables/sales responsibility with SMEs.”
in particular, Because income-based financing works well for SMEs in high-income countries like the UAE and similar countries; Development Finance Institutions, which are mainly established to invest in small projects, are difficult to get financing from. Economically developed country.
The way the platform works is very 'MENA region' due to the explosion of established platforms for service-based businesses like restaurants, which have millions in MENA.
Here's an example: an SME like a restaurant uses a platform like Talabat (acquired. In 2015, Delivery Hero paid $158.52 million to deliver its meals and wants to use RBF. Apply for loan. through The Talabat platform integrated with CredibleX uploads its historical sales data/ratings; CredibleX then makes a credit decision on loan issuance within 24 hours.
The restaurant then transfers the loan to CredibleX in the form of a direct payment to Talabat (which has a similar relationship with 37 other partners).
The company launched in March 2024 and claims to have disbursed more than AED 100 Mn (US$27Mn) to SMEs.
Nagaraj previously worked at Citi and founded Invoice Bazaar, a supply chain finance platform that helps SMEs to large corporations with early payments. After exiting that business in 2021, Anand launched CredibleX with co-founders Ahmad Malik and Hassan Reda.
Explains Nagaraj: “Our approach helps us tap into a large pool of SMEs and certainly helps in recovering repayments from SMEs when things are bad.” CredibleX is fully regulated by FSRA at Abu Dhabi Global Markets.
The seed round included equity from Further Ventures and debt from backers including Kilgour Williams Capital. Further Ventures has LPs. Includes ADQ and Mastercard..