Can Zelo Fix the SME Cash Flow Crunch?
For many SMEs across the UAE, the journey to growth often hits a snag: waiting for payments. We've all heard the stories, or perhaps even lived them – invoices approved, services rendered, but the money takes weeks, sometimes months, to land in the bank account. This common challenge, often called the "working capital gap," can seriously slow down even the most dynamic businesses.
Well, there's a new development in this space that could make a difference. IHC, a global investment company, recently acquired eFunder, a private financing platform that's been working to bridge this very gap. With this acquisition, eFunder has now been rebranded as Zelo, marking a new phase for the platform.
What is Zelo, and How Can It Help?
Since August 2020, under its previous name, Zelo has been offering a solution: receivables-based funding. In simpler terms, if you have approved invoices, Zelo can convert them into working capital for your business, often within 24 to 48 hours. This means instead of waiting 60 to 120 days for a client to pay, you could have the funds you need to keep your operations running smoothly, pay your staff, or invest in your next project.
Zelo is fully licensed and regulated by the ADGM's Financial Services Regulatory Authority (FSRA), which is an important point for any business considering financing options. They focus on industries like construction, logistics, healthcare, industrial services, and oil & gas – sectors where long payment cycles are particularly common.
Why This Matters for SMEs
The challenge of delayed payments is significant. SMEs make up over 95 percent of registered businesses in the UAE and contribute to more than half of the national GDP. Despite this, they often face a considerable credit gap – a nearly US$250 billion problem across the Middle East and North Africa. This gap prevents many businesses from reaching their full potential.
IHC's acquisition of Zelo highlights the importance they place on supporting these vital businesses. As Syed Basar Shueb, CEO of IHC, put it, "SMEs are the backbone of a diversified and future-ready economy." The goal is to provide a more timely and accessible way for SMEs to get the capital they need to thrive.
Dhanush Arjun, CEO of Zelo, also emphasised the core mission: "Zelo exists to eliminate the wait. The wait for payments, the wait for growth, the wait for opportunity."
A Focus on Speed and Simplicity
One of the key aspects of Zelo's approach is its emphasis on making the process as straightforward as possible. They offer a fully digital onboarding experience, aiming for automated funding decisions and quick access to capital. This can help businesses avoid cash flow delays and allows them to reinvest in their growth more quickly. Plus, as your business performs better, your financing limits can also increase, creating a more responsive funding experience.
Zelo's operations will continue to be led by the co-founders of eFunder, Dhanush Arjun (CEO) and Deepak Sekar (COO), alongside their experienced team. So far, the platform has facilitated over 9,000 transactions and deployed more than US$200 million in funding, showing their impact within the region's SME landscape.
This shift for eFunder to Zelo, backed by IHC, could offer a practical solution for many SMEs looking to navigate the complexities of cash flow and unlock their growth potential. It's a reminder that innovative financial solutions are continuously evolving to support the backbone of our economy.
