Saudi Aramco’s Wa’ed invests SAR19m in fintech startup Lamaa

Wa’ed, Saudi Aramco’s entrepreneurship arm, has announced a SAR19m Pre-Series A investment co-led with Raed Ventures in Lamaa, the Saudi-based fintech startup. The company provides financing solutions for small and medium enterprises (SMEs), including supply chain finance and buy now, pay later.

The Riyadh-based startup was established in March 2021 by entrepreneur Sumeet Khutale, who has recently relocated from London to Riyadh.

Lamaa seeks to address available funding gaps for SMEs whose size presents a challenge in obtaining credit risk ratings, directly impacting their cash flow.

By enabling early invoice payment for SMEs through its digital marketplace, Lamaa will offer corporate treasuries an option to deploy surplus funds through dynamic discounting of invoices. Alternatively, approved and unpaid invoices can be listed for banks and financial institutions to clear the reduced payments on behalf of the corporates.

The investment secured from Wa’ed and Raed will help Lamaa further develop its Trade Receivables Discounting System (TReDS) platform to facilitate factoring across thousands of suppliers simultaneously. Its goal is for SME suppliers to benefit from shorter cash conversion cycles independent of credit history, collateral, promissory notes, corporate treasuries, or individual investors to generate a return from early settlement.

“We intend to use the additional funding to scale Lamaa into a major regional provider of SME liquidity enabling SME growth with immediate plans for expansion into Egypt and the UAE,” said Sumeet Khutale, founder of Lamaa.

“For a newly established startup that has already acquired impressive growth and secured key partnerships across the Saudi market, Lamaa presents the type of entrepreneurial business that not only empowers its own team and startup sector, but can also promote a stronger foundation for other emerging local SMEs who use the platform for financing solutions,” said Fahad Alidi, managing director at Wa’ed.

Phase two of the platform is currently undergoing licensing negotiations, which will incorporate family offices and private investors to Lamaa’s invoice factoring marketplace, providing additional investment channels to support SMEs, ahead of expanding into Egypt, the United Arab Emirates, and Qatar.

Meanwhile, the Middle East is becoming a popular investment location for both regional and worldwide investors. Young entrepreneurial innovation contributes considerably to overall productivity development.

Read: The growth of startups in the MENA region

According to Wamda, investment growth has continued in the Middle East and North Africa region, with 44 startups raising more than $175m in April, up from $5m in March 2021.