Saturday June 15th, 2024
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Saudi SME Crowdlending Platform Funding Souq Raises $2.5 Million

The startup will look to scale operations and explore new markets, in the Middle East and beyond.

Startup Scene

Saudi SME Crowdlending Platform Funding Souq Raises $2.5 Million

Saudi Arabia-based crowdlending platform, Funding Souq, has announced the raise of a $2.5 million seed round led by a number of high-profile investors including 500 Global Partner, Amal Dokham, and Head of Strategy at a leading Global Financial Centre, Christian Kunz, in addition to existing investors Partner at STV, Mazin Alzaidi, and IslamicFinanceGuru.

Founded in 2022 by British entrepreneur, Martin Jaouni, Funding Souq aims to connect investors with startups and SMEs for loans between $20K and $150K. On the investors’ part, they stand to gain exposure to the nascent concept of startup/SME lending and while supporting local businesses and making an impact - especially in light of the fact that, according  to the IMF, only 2% of GCC lending goes to SMEs and startups, as opposed to 22% in other high-income countries.

"SMEs in the GCC are highly underserved by financial institutions and often don’t qualify for the financing they deserve as traditional lenders are overly conservative,” Jaouni said. “This limits economic growth and is one of the main reasons why we started Funding Souq.”

The platform financed 47 SMEs in Saudi Arabia and UAE in the first 12 months of operation - though that doesn’t mean they back just anyone. The platform uses a robust credit-scoring system that analyses tens of variables before shortlisting a business for an equally robust round of due diligence. This selectiveness means that less than 9% of the businesses that apply get approved.

With the new investment, Funding Souq, will look to scale operations and grow debt investor partnerships to focus on Sharia-compliant financing. Excitingly, the startup will also look to explore new markets both inside the Middle East and beyond.