Growing the region’s SME sector with financial solutions from the heart of Abu Dhabi
We caught up with the founders of eFunder, Deepak Sekar, Dhanush Arjun and Siddhartha Aggarwal, to know more about their expansion journey in the UAE, and how they plan to deepen their market presence in the Nation’s Capital in their core vertical - e-commerce, while expanding in new verticals of delivery aggregators, healthcare, online payment gateways and government projects.
eFunder is a platform that provides a sophisticated instant matchmaking tool, to seamlessly connect commercial borrowers with the right alternative non-bank lender, and since joining Hub71’s vibrant community, eFunder has integrated close to 14 buyer ecosystems, completed around 500 financing transactions, and saved an average of 29.7 days of waiting period for their customers with no defaults.
What did you do before becoming an entrepreneur, and what inspired you to switch?
We are three first time founders having spent our professional careers in diverse backgrounds:
Deepak Sekar – a former investment banker and corporate strategy professional for early to growth stage companies.
Dhanush Arjun – a private equity professional with significant experience in the financial services and the FinTech space.
Siddhartha Aggarwal – a technology evangelist who has helped build payment and FinTech products from the ground up.
All three of us had a desire to leverage our experience and bring about an impactful change. The stars aligned when we saw a dearth in the market of financing options available to SMEs especially those who work with online e-commerce platforms like Amazon, Noon and others.
According to UAE Ministry of Economy, the SME sector represents more than 94% of the total number of companies in the UAE and employs more than 86% of the private sector's workforce but only 5% of total lending is directed to the SME sector.
With a clear goal of levelling the playing field for this vital segment of our community, we ventured out to build a digitally integrated financing solution that enables SMEs timely access to working capital solutions through bespoke vertical specific product offerings.
Through your solution, how do you enable better financial services through early payment solutions for your end users?
A significant portion of the value generated by SMEs gets locked-up in unpaid invoices or receivables and the inability to obtain them in a timely manner hinders their growth. SMEs are constantly on the lookout for avenues to get paid quicker and re-invest in growth – whether to buy additional inventory, launch new products, pay for logistics and increase team size. This is where eFunder steps in.
Our easy to use, fully integrated digital platform allows SMEs easy access to cash against their receivables at the click of a button. We focus on providing receivable financing solutions like factoring and working capital advances, to high growth SMEs who operate with digitally integrated ecosystems like Amazon, Noon, and others, as well as delivery aggregator platforms such as Zomato, Talabat, Deliveroo etc.
By facilitating the timely availability of liquidity for our SME prospects, we enabled them to gain the time and opportunity to accelerate their business growth and avoid facing the lack of working capital that can cripple their operations, by ensuring they get instant cash and consistent cashflows to meet their business potential.
How does your digital financing platform allow businesses to effectively make quality credit decisions and stabilize cash flows?
Audited financials, bank statements and other traditional credit assessments are simply not the right barometer to measure an SME’s strength.
Our digital platform is fully integrated with buyer ecosystems (e.g., Amazon) that SMEs operate in, providing invaluable insights that enable a multi-dimensional view on the SME’s performance as well as right sized credit offering that would enable the SME to meet its growth needs.
Also, our credit evaluation through our proprietary risk framework and machine learning models, determines the optimum amount of advance to give to an SME, instantly delivering cash disbursals in 24-48 hours of funding request.
We value that each SME is unique - one size does not fit all. Our verticalized approach towards building scalable integrations across each sector allows us to build bespoke underwriting frameworks for each vertical. We grow our exposures to the SMEs based on sales growth, helping them ride out business cycles. Collections are made directly from buyer ecosystems (e.g., Amazon) by eFunder, ensuring repayments are linked to business cash flows. This frees SMEs from EMI repayment stress, typical to traditional borrowing.
Our easy to use, fast financing, digital solution provides the necessary means for the SMEs to enhance their business growth by availing instant cash and consistent cashflows stabilising their operations and enabling them to focus on their core activities instead of stressing about working capital needs.
How has being part of the Hub71 community helped you in your growth journey?
We found our home in Hub71 and we are thrilled to be at the epicenter of the startup activity in the UAE’s capital. Just within a few weeks of joining Hub71’s vibrant community, we had several inbound inquiries from large strategic organizations to explore partnership opportunities that could propel our regional and international expansion.
Hub71’s attractive incentive program allows us to reduce the cost impact that a startup would typically have in its initial years to funnel that towards fast tracking our team size and focus on enabling further business development and growth. In addition to the exposure, the community engagement team have also provided valuable support in reaching out to regulators, investors, partners, and potential customers for our business expansion.
What are your overarching plans for 2022?
Ever since our commercial launch, we have become a regulated financial institution under Abu Dhabi Global Market (ADGM), integrated with close to 14 buyer ecosystems, completed around 500 financing transactions, and saved an average of 29.7 days of waiting period for our customers with no defaults.
In 2022, we hope to deepen our market presence in the UAE in our core vertical - e-commerce, while expanding in new verticals of delivery aggregators, healthcare, online payment gateways and government projects among others. We are targeting a Saudi entry in 2022 as part of a phased expansion in the GCC and are gearing up for a substantial fund raise, and are open to discuss partnership opportunities with interested parties.
To learn more about Efunder, visit https://efunder.ai/