HALA secures USD $157 million to boost SME fintech in SA
Saudi fintech firm HALA has secured USD $157 million in a Series B funding round, one of the largest of its kind in the Middle East.
The latest round was led by The Rise Fund, part of TPG's global investment platform, alongside Sanabil Investments, which is backed by the Public Investment Fund. Several other venture capital firms participated, including QED, Raed Ventures, Impact 46, Middle East Venture Partners, Isometry Capital, Arzan VC, BNVT Capital, Kaltaire Investments, Endeavor Catalyst, Nour Nouf Ventures, Khwarizmi Ventures, and Wamda Capital.
HALA provides embedded financial services for micro, small and medium enterprises (MSMEs) in Saudi Arabia, including business accounts, card issuance, payment and transfer services, POS solutions, and financing products. The company's app is reported to serve over 142,000 businesses, processing more than USD $8 billion in annual transactions. According to the company, revenues have increased by 60% year-on-year, and it deals with around 70 million transactions valued at nearly USD $700 million every month.
Funding focus
The Series B capital will be used to build HALA's position in the Saudi market, launch new services including lending products designed for MSMEs and freelancers, and support expansion to new regions. The company aims to support Saudi Arabia's Vision 2030 programme, which targets increased SME contribution to the country's GDP.
According to HALA, the SME sector in Saudi Arabia comprises between 614,000 and 1.8 million companies, representing 90–99% of all private businesses. These businesses account for around 20–35% of Saudi GDP, an estimated USD $310–375 billion yearly, and provide employment for approximately 4.7 million people across industries such as retail, manufacturing, and construction. From 2016 to 2021, SME contribution to GDP rose by 45%, attributed to government programmes, digitalisation efforts, and increased financing for businesses.
Esam Alnahdi, Co-founder and Chairman at HALA, said:
This landmark investment is a turning point for HALA, reflecting on our relentless pursuit of innovation and excellence in serving small businesses. We are honored that our new investors recognize the potential of our vision and the impact we aspire to make in the MSME landscape. Our journey is just beginning, and this support fuels our drive to create meaningful change.
HALA's Co-founder and Group Chief Executive Officer, Maher Loubieh, added:
We are honored by the continued trust and support of our existing investors – distinguished local and regional business leaders and funds – whose contributions have been instrumental to HALA's journey so far. At the same time, we are proud to welcome all our new partners, including TPG's Rise Fund and Sanabil, who, by joining our journey, gave a strong testimonial of the business that the team has built. As we look at the next phase of our growth, we believe that our diverse group of prominent investors bring valuable global expertise and perspective which will elevate our ambitions to execute with even greater scale and impact.
Investment perspective
Yemi Lalude, Partner at TPG and Head of Europe, Middle East and Africa for The Rise Funds, commented:
HALA is uniquely positioned to empower micro and small businesses, a key pillar in the region's economy, by delivering business owners and their customers a broad and growing set of payment solutions. We are excited to support the HALA team in building a clear leader in this underserved segment. Our investment underscores our belief in the growth potential of this market, the rising demand for robust digital banking solutions, and the critical role entrepreneurs play in shaping the next generation economy, not just though innovation but by creating jobs, expanding access, and delivering meaningful social impact.
A spokesperson for Sanabil Investments said:
We are excited to lead this landmark Series B funding round for HALA. This investment underscores our belief in HALA's potential to reshape the future of financial services for SMEs and aligns with Sanabil's mission to support visionary companies with patient capital and strategic guidance. We look forward to partnering with HALA and the other investors in supporting their continued success and expansion.
HALA states that it will use the funding to further embed itself in the Saudi market, develop lending and other new financial products for MSMEs, and expand its operations to new regions as it looks to support the ongoing digitalisation of the private sector in Saudi Arabia and beyond.
