Flow48 Secures US$69 Million Series A Funding Round

Flow48, a UAE-based fintech company specializing in lending to small and medium enterprises (SMEs) across emerging markets, has raised US$69 million in a Series A funding round.

The round, comprising both debt and equity, was led by the French venture capital (VC) firm Breega as well as 212, a Luxembourg-based VC firm, with participation from investors like Speedinvest, Daphni, Endeavor Catalyst, Evolution Ventures, and Plus VC. 

Founded in 2022, Flow48 helps SMEs grow by offering upfront financing, converting their future revenues into immediate capital with flexible terms. 

The funding will allow Flow48 to strengthen its market presence in South Africa and the UAE, where it already has a footprint, while expanding into Saudi Arabia’s SME ecosystem. Additionally, Flow48 aims to enhance its platform with new features and leverage alternative data and advanced risk assessment tools to provide more tailored financial solutions. 

In an interview with Inc. Arabia, Idriss Al Rifai, co-founder and CEO of Flow48, said, “With this new funding, we are well-positioned to execute our growth roadmap for 2025, which aims to significantly scale our outstanding loan book, enabling us to onboard senior institutional debt investors for portfolio securitization. This strategic step is critical for lending companies, as it essentially sets the stage for us to deploy hundreds of millions of dollars in collaboration with these senior lenders. To unlock this capability, we first need to grow our portfolio using the current capital, achieving the necessary scale.” 

Al Rifai also highlighted the company's plans to expand into Saudi Arabia, emphasizing the rapid pace of SME growth in the Kingdom. “We chose Saudi Arabia, because it’s the largest economy in the GCC, with an SME market three to four times larger than that of the UAE’s, representing a substantial opportunity for growth," he said. "Moreover, Saudi Arabia is spearheading significant government-driven economic initiatives, notably Vision 2030, prioritizing SME sector development to diversify away from oil dependency. SMEs play an essential role in job creation, innovation, and economic resilience, making access to capital critical. Given these market tailwinds, we’re confident that Flow48’s solution will thrive and solidify our position as a leading partner for SME lending in the region.” 

According to Al Rifai, there exists a significant opportunity for Flow48 in catering to SMEs in emerging markets, where they remain largely underserved. “SMEs are the backbone of any healthy economy, and one of the key distinctions between developed and emerging nations is the strength of their SME ecosystems," he explained. "In developed markets like the United States and parts of Europe, SMEs benefit from strong institutional support, robust financial reporting, and access to capital across the financial spectrum." By comparison, SMEs in emerging markets often face significant hurdles, with Al Rifai noting that financial institutions are often hesitant to lend to them due to higher perceived risks and the lack of audited statements. Additionally, in regions like the Gulf, historical economic structures have concentrated entrepreneurship in industries such as oil and gas, limiting SME diversification and access to capital. 

“In markets like Saudi Arabia and the UAE, SMEs contribute approximately 30 percent of gross domestic product (GDP) and generate 80-90 percent of jobs, yet they account for only 6-8 percent of total bank lending," Al Rifai pointed out. "This stands in stark contrast to markets like the US, where SMEs contribute a similar share to GDP, but receive 30-40 percent of bank financing. This discrepancy highlights a massive structural gap in SME lending within the region, underscoring the need for alternative financing solutions.” 

Al Rifai went on to note that while many traditional banks remain hesitant to lend due to underwriting challenges, fintech solutions like Flow48 are changing the landscape. “By leveraging alternative data, automated underwriting, and technology-driven risk assessment, we aim to unlock SME financing at scale, ensuring that these businesses receive the capital they need to grow and contribute even more significantly to the economy,” Al Rifai added. 

Al Rifai explained that while many banks have extensive SME client bases, they often struggle with underwriting due to fragmented financial data and inefficient risk assessment tools. “Our solution addresses this by leveraging an algorithm that automatically processes SMEs’ bank statements, reconstructs income flows, and identifies fraudulent activity," he said. "This allows banks to quickly filter and evaluate SME borrowers, improving accessibility to financing." 

While SME challenges vary by region, Al Rifai believes the core issue — access to technology-driven financing — is consistent across emerging economies. “There may be operational nuances specific to each region, but the core need, accessible, technology-driven SME financing, remains the same," he said. “The key enabler for our model is the level of fintech development within a country, particularly in areas like integrations, automated collections, and open banking.” Another key factor that can enable solutions like Flow48, he explained, is fintech maturity. “For our solutions to be effective, there needs to be a baseline of tech readiness, which is why we focus on markets where digital financial infrastructure is evolving rapidly,” Al Rifai explained. 

Idriss Al Rifai, co-founder and CEO of Flow48. Image courtesy Flow48.

Al Rifai is optimistic about the shifting landscape in the GCC, pointing to government-led economic diversification efforts, increased fintech activity, and a growing awareness of the importance of SME financing as key drivers of change. “We believe that the SME sector in the GCC is experiencing a strong tailwind, driven by government initiatives aimed at economic diversification, a surge in startup and fintech activity, and a growing recognition of the importance of SME financing,” he said. 

While Flow48’s focus is on the UAE, Saudi Arabia, and South Africa, Al Rifai envisions that the company can play a role beyond these markets in the future. “Although our immediate focus will remain on these three markets, our longer-term vision is to establish Flow48 as a key player across both the Gulf and select African economies, regions we believe are ripe for fintech-enabled SME financing,” he said. 

In the coming 12 to 18 months, Flow48 will prioritize scaling its operations to qualify for senior securitization facilities, a key milestone in its growth strategy.  Al Rifai emphasized that reaching this scale is the company’s primary goal, allowing it to build a lending portfolio worth hundreds of millions of dollars and solidify its position in the SME financing space.  

On the product side, Flow48 will continue to enhance its platform with new integrations and improved short-term working capital solutions. “Our core lending model remains intact, but loan structures and delivery mechanisms may evolve as we innovate,” he added. “For instance, we are currently in discussions with partners about launching a card-based lending product, and developing solutions that allow large financial institutions to collaborate with us in new ways. As we grow, adaptability and innovation will remain central to our approach, ensuring we continue to meet the evolving needs of SMEs in the region.” 

Given this state of the ecosystem, Al Rifai urged investors to continue deploying capital in the GCC, a region experiencing strong momentum. “The GCC is experiencing significant momentum, with venture funding reaching $3.5 billion in 2023, marking a 30 percent year-on-year increase despite global economic uncertainty,” he noted, with the UAE and Saudi Arabia accounting for nearly 80 percent of total VC investment. 

However, for him, as startups mature, securing larger Series B and C rounds locally remains a challenge. This funding gap highlights a critical challenge for the region’s startup ecosystem. “In 2023, fewer than 15 percent of GCC startups that reached Series B or later were able to raise from regional funds, signaling a clear gap that investors need to address,” he explained. To sustain growth and prevent startups from relocating abroad, he emphasized the need for institutional investors to step in, strengthening the ecosystem and keeping economic benefits within the region. 

As for SMEs, Al Rifai those looking to raise funds to adopt an investor mindset. "We often engage with solid businesses that have strong fundamentals but lack structured financial reporting, which is understandable since many SMEs, like restaurants or retail shops, don’t have external reporting obligations," he shared. "However, embracing digitalization and modernizing data practices, such as maintaining well-organized bank statements, financial reports, and clear business metrics, can greatly accelerate the funding process."

He also advised founders to remain resilient. “My advice to founders is to stay resilient – those who have managed to sustain operations through the downturn are now well-positioned to capture the next wave of growth," he said. "Keep building, engaging with investors, and capitalizing on the renewed momentum in the market." 

Pictured on image is (in center) Idriss Al Rifai, co-founder and CEO of Flow48, with colleagues. Image courtesy Flow48.