Arib, a digital loan broker in Saudi Arabia, closed a $2.3 million seed investment round that will allow the company to expand its product range and enter new markets.
Merak Capital, an investment company focused on technology ventures and licensed by the Capital Market Authority of Saudi Arabia, led the funding round with participation from angel investors, Arib said on Monday.
Arib will use the funds to meet the requirements set by the Saudi Central Bank to finalise the licensing process and expand its portfolio of services to include different types of loans, including personal loans, home loans and credit cards, the company said.
The digital broker will also use the proceeds to streamline its operations and technology infrastructure, it said.
“Saudi Arabia is witnessing an unprecedented revolution in technology and it’s not more apparent than in the FinTech space,” said Waleed Talat, chief executive and co-founder of Arib.
“Alongside the accelerated adoption of FinTech solutions, Sama introduced a licence for digital brokerages as a supportive activity to financing services. We have been granted initial approval by Sama for the activity of digital brokerage services.”
Start-ups in Saudi Arabia attracted a record $168m worth of venture capital funding through 54 transactions in the first half of 2021, according to data platform Magnitt. This is about 94 per cent of the money secured by the kingdom’s start-ups in 2020.
The FinTech sector, in particular, has witnessed significant growth in the kingdom over the past few years.
The kingdom had 16 venture investments in FinTech with a total deal value of $157.2m in the first eight months of 2021, a report by Fintech Saudi said. That was up from seven venture investments worth $7.8m in 2020 and six venture investments worth $18m in 2019.
Founded in 2019 by Mr Talaat, Omar Alhammad and Mohamed Dessouky, Arib introduced its first product, Syaaraat, a platform that provides consumers with auto financing options from different banks and financing companies.
The platform helps to match the best auto financing options with users, based on their credit profile, while increasing sales, lowering costs and offering access to new clients for banks and car dealerships, Arib said.
The digital loan broker served more than 50,000 clients across Saudi Arabia over three years, it added.
Merak Capital will help Arib achieve its growth targets, form new partnerships with regional financial institutions, build a talented team and expand in offerings and into other markets, the companies said.
“We have always been committed to investing in technologies that play a pivotal role in the region’s digital infrastructure,” said Abdullah Altamami, partner and chief executive of Merak Capital.
“We are proud to back Arib as it accelerates in digitalising hundreds of billions in loans across the kingdom and the region soon.”
Founded in 2018, Merak Capital focuses on alternative investment classes such as venture capital, private equity and special projects.