Riyadh-based fintech Buildnow has raised $9.4 million in a seed round led by Raed Ventures and Khwarizmi Ventures, it announced on Tuesday at LEAP, a Saudi technology conference. The round includes $6.5 million of equity investment and $2.9 million in debt financing. It was also joined by other investors and angels, including Careem’s Abdulla Elyas.
Founded in 2022 by Hisham Al Saleh, Rahat Dewan, and Abdulla Sheikh, Buildnow offers financing solutions for construction material to different stakeholders in the supply chain – including contractors, manufacturers, and traders.
Abdulla Sheikh, the co-founder and CEO of Buildnow, explaining the problems they’re trying to solve with their platform, said, “Annually, $42 billion worth of goods are traded within the construction supply chain in Saudi Arabia alone. Suppliers of goods can only offer limited credit, both in amount and duration, to buyers. Credit is extended based on relationships rather than an objective assessment of risk. Given that the SMEs purchasing these materials only get paid much later, this results in a cash crunch and constrains their ability to grow.”
According to its website, the solution offered by Buildnow is Sharia-compliant and can offer one to six months of financing between SAR 100,000 to SAR 1 million ($27,000 to $267,000). The financing can be availed by locally incorporated businesses with at least one year of operations and SAR 4 million ($1.07 million) in revenue.
The pricing offered by Buildnow varies on a case-by-case basis, determined by different risk factors, notes its website.
“Buildnow digitally captures data points such as financials, legal standing, and market reputation of the buyer to better assess credit risk. This enables Buildnow to supply materials on credit terms tailored for the buyer while paying cash upfront to the SME suppliers,” stated the startup in a statement.
The platform, per statement, offers users three key benefits: accelerated acquisition of materials in bulk, streamlined digital processes enhancing ease of doing business, and expanded supplier networks with flexible credit terms.
Buildnow claims to have facilitated over 250 SMEs since its launch, supplying more than 50,000 tons of raw material.
Saed Nashef, Founding Partner at Raed ventures, said, “Investing in Buildnow was a decision driven by our confidence in the team’s ability to address a critical market inefficiency. Buildnow’s offering doesn’t just facilitate transactions; it in fact empowers SMEs within the construction industry, an industry that’s undergoing a period of massive expansion in the Kingdom, and represents a cornerstone of Vision 2030.”
“While they operate one of the fastest-scaling businesses in the region, their success means thousands of SMEs can be more productive and have more stability in their business. This can impact the actual realisation of the vision 2030’s mega projects building the new Saudi Arabia,” he added.
Abdulaziz AlTurki, Managing Partner at Khwarizmi Ventures, said, “Buildnow is led by passionate and smart founders in an unattractive, massive, and fragmented sector. We are confident that, with their diverse and relevant backgrounds, the team at Buildnow is well positioned to capture this opportunity, while accelerating the growth of construction and building materials SMEs.”
It plans to use the latest funds to “enable the entire construction SME supply chain to capture otherwise lost opportunities and supercharge their growth.”
