CredibleX, a working capital finance platform for SMEs (small and medium enterprises), recently raised AED 200 million (USD 55 million) in equity and debt funding. It received seed equity investment from Further Ventures and debt participation from Kilgour Williams Capital, Berkley Square Finance, and several other debt providers. The funding will accelerate CredibleX’s growth and expand its offerings to help even more SMEs thrive.
CredibleX has so far disbursed AED 100 million in loans to small businesses across the UAE since the pilot launch of its platform eight months ago. With over 35 distribution partners, such as Network International, DMCC, National General Insurance, Agthia, Watermelon, and Mamo, CredibleX has unlocked financing opportunities for more than 100,000 SMEs, enabling them to apply for credit through its platform.
CredibleX’s platform, which integrates directly into the operations of businesses, offers fast, transparent, and accessible financing options tailored to the Emirati SME sector’s unique operational needs. By working with embedded partners, the company aims to reach out to a wide range of small businesses, offering them seamless access to capital without the complexities typically associated with traditional lending. Today’s episode of the “Start-up of the Week” will feature International Finance discussing the venture in detail.
The Art Called ‘Revenue-Based Financing’
SMEs these days find it hard to raise venture capital. However, non-dilutive, revenue-based financing (RBF) has emerged as an alternative. This has become a very popular trend in the UAE and in the wider MENA (Middle East and North Africa) region, resulting in plenty of start-ups rising to meet the challenge of providing working capital financing to SMEs. CredibleX, one of the prominent start-ups, operates under a model where it partners with large aggregators and targets SMEs within their vertical ecosystem.
Revenue-based financing has been fruitful for SMEs in high-income countries like the UAE, as it is harder to obtain financing from so-called Development Finance Institutions, which are primarily set up to invest in projects in less economically developed countries.
CredibleX, which started its operations in March 2024, claims to have issued over AED 100 million (USD 27 million) to SMEs under its revenue-based financing model. The start-up’s goal is simple: all SMEs should be able to easily access and choose from financial options that will help them grow their businesses. Entrepreneurs should not have to stress about things like bank visits, long loan application times, and piles of paperwork.
Financial institutions, on the other hand, by associating themselves with the start-up, will open up new revenue streams in the form of “Embedded Working Capital Finance,” while helping their SME customers unlock one of their biggest challenges: financing. CredibleX’s fully digital application takes minutes, and funds are disbursed in hours, providing SMEs with working capital in the blink of an eye.
Meet Embedded Solutions
CredibleX, licensed and regulated in the Abu Dhabi Global Market, is known for its flagship product called the “Embedded SME Insurance Finance,” which essentially provides SME insurance premiums, offering BNPL (Buy Now Pay Later) options for Group Medical, Fleet, and Trade Credit Insurances.
This product has been particularly designed with small businesses’ cash flow challenges in mind, especially when faced with large upfront costs like insurance premiums. Typically, SMEs end up paying their annual insurance premiums in one lump sum, which can strain their finances and limit their ability to invest in growth.
CredibleX’s “Embedded SME Insurance Finance,” on the other hand, allows SMEs to pay their insurance premiums in a more manageable, staggered way. This approach not only eases the financial burden on SMEs but also ensures that they can maintain essential insurance coverage without compromising their cash flow.
“Our collaboration with top-tier insurance companies is built on a foundation of mutual benefit. By partnering with CredibleX, insurance providers can secure their annual premiums in one go, reducing the risk of non-payment and improving their cash flow predictability. This arrangement offers insurance companies a reliable revenue stream while allowing them to extend their reach within the SME sector,” the start-up stated.
SMEs gain access to essential insurance coverage without the stress of large upfront payments. They can budget for their premiums as they would for other operational expenses, paying in instalments that align with their cash flow cycles. This financial flexibility empowers SMEs to better manage their resources, invest in growth opportunities, and ultimately thrive in a competitive market.
Next is “Embedded B2B Channel Finance,” which the start-up explained as follows: “In the rapidly evolving B2B landscape, platforms, aggregators, and large corporates are at the heart of a thriving ecosystem of SMEs. Whether these SMEs are suppliers delivering goods to you or buyers purchasing from your platform, their success is closely tied to their ability to access timely and flexible finance. By partnering with us, you can offer embedded financing solutions that empower your SME ecosystem, driving growth and ensuring smooth operations across the board.”
For B2B platforms, aggregators, or large corporates, their suppliers occupy critical roles in their supply chain. By integrating CredibleX’s embedded finance solutions, these large conglomerates can provide their SME suppliers with the working capital they need to fulfil orders without delay.
With the start-up’s embedded finance solutions, SME buyers can access the liquidity they need to purchase essential goods from a big corporation’s platform or wholesale operations. This not only helps them optimise their supply chain but also strengthens their relationship with the parent business, leading to increased sales and long-term growth.
Options Galore
CredibleX’s “Embedded Point of Sale (POS) Financing” has emerged as a leading POS provider in the MENA region. By integrating this solution, POS providers can offer their SME clients seamless access to working capital, enabling them to manage cash flow, invest in inventory, and expand their businesses—all through their existing platform. This partnership not only enhances the value of the start-up’s clients’ POS offerings but also strengthens their relationships with merchants.
CredibleX’s POS financing offers benefits such as effortlessly embedding into POS systems, ensuring a smooth and user-friendly experience for the merchants. The start-up also provides customised financing solutions that cater to the unique needs of different SMEs within the POS provider’s ecosystem.
Let’s conclude the article by discussing CredibleX’s “Invoice Finance,” which empowers SMEs to have early access to cash flow. As SMEs rely on receivables from top-tier clients, these payments serve as the lifeblood that keeps their operations running smoothly. Partnering with large corporate clients can significantly enhance SMEs’ businesses by securing receivables and negotiating better terms with suppliers.
However, working with these large clients often brings challenges such as tight delivery schedules, stringent quality demands, and extended payment timelines. This is where CredibleX comes in with its Invoice Finance or Receivables Finance solutions, as they are designed to provide businesses with the liquidity they need to meet these challenges head-on.
CredibleX offers a receivables financing solution that allows SMEs to get paid early on invoices issued to large customers. Instead of waiting for the typical 30, 60, or 90-day payment terms, businesses can access the funds tied up in their receivables almost immediately. This early access to cash flow enables them to cover operational costs, invest in growth opportunities, and manage their businesses more efficiently.