UAE’s Beehive raises $5 mln in Series A funding, expands into Saudi Arabia

DUBAI - Beehive, the Middle East’s first regulated peer-to-peer (P2P) lending platform, has received $5 million as part of a Series A round led by Saudi-based venture capital fund Riyad Taqnia and supported by the Mohammed bin Rashid Fund, the financial arm of Dubai SME, as well as several other regional investors, the company said in a media statement today.

This funding brings the total raised by Beehive to $10.5 million since it launched in November 2014, said the company.

This round of funding will support the platform’s expansion into Saudi Arabia, where the company’s core focus will be on driving brand awareness and acquisition, founder and CEO of Beehive, Craig Moore, told Salaam Gateway in an email.

“In the short-term, we expect to work with our strategic partners and leverage their local knowledge and market intelligence,” Moore said.

“In the mid-term, in line with the growth of the KSA market, we anticipate seeing a wider adoption of fintech and the general tech industry and we will look to create opportunities to build on our UAE experience in a larger market,” he added.

Moore expects the “asset light” sectors that are knowledge-based, tech companies and digital businesses to be the primary sectors that will be the most receptive to Beehive in Saudi Arabia in the immediate term.

Saudi Arabia does not have a regulatory framework for fintech but the market is evolving and Beehive is engaging with regulators, said Moore.

“Whilst no formal regulation exists currently (much as it didn’t in the UAE when we launched), we believe there is a good appetite for fintech and that regulation will follow in due course,” Moore said.

Beehive became the world’s first Shariah-compliant P2P platform to receive third-party, independent certification when it was certified by Shariyah Review Bureau in September 2015.

In March this year, Beehive also became the first P2P lending platform to be regulated by the Dubai Financial Services Authority (DFSA), which is the regulator for financial services based at the Dubai International Financial Centre (DIFC).

Since then, Beehive has provided around 70 percent more in loans, from 75 million Emirati dirhams ($20 million) to 130 million dirhams ($35 million), to small and medium-sized enterprises, according to Salaam Gateway calculation of data provided by Beehive.    

Funding requests rose from 150 as of March this year to 200, and the number of investors increased from 4,500 to 5,000. 

“We saw a big uptake after we got regulated in March plus this year has seen a far greater awareness and media buzz around fintech which has benefited us. We have seen an increase in referrals which has also driven our numbers,” said Moore.  

The top three sectors by number of companies financed by Beehive in the UAE are Other Services—including consultancies, professional services and agencies—IT and telecommunications, and food services.

The Riyad Taqnia Fund is a venture capital fund between Riyad Capital, the investment arm of Riyad Bank, and Taqnia, the Saudi Technology Development and Investment Company that is owned by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF). The PIF is a backer of the world’s largest equity fund, worth over $93 billion, that invests in technology sectors. Other backers include Japan’s Softbank, Abu Dhabi’s Mubadala Investment, and Apple Inc.

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