D360 raises its capital to fuel lending expansion

Digital bank D360 is raising its capital by 38.9% to SAR 2.92 bn after its extraordinary general assembly greenlit the move, according to a Tadawul disclosure. Derayah Financial, a strategic investor in the bank, will put in SAR 100 mn, diluting its position to a 16.35% stake upon completion from 20.4%.

The issuance is part of a Series A funding round that kicked off last year, sources familiar with the matter tell EnterpriseAM. D360 will use the SAR 1.5 bn in proceeds to expand its lending book, target the Kingdom’s SME finance market, and scale its API banking infrastructure.

REMEMBER- D360’s been delivering on its growth ambitions: It inked an MoU with MoneyGram for cross-border payment and remittances services last year, and struck a partnership with TerraPay for real-time fund transfers.

How it’ll work: The raise will be executed through an SAR 1.5 bn share issuance, with new shares priced at SAR 20.5 each, giving the bank an SAR 4.5 bn (USD 1.2 bn) pre-money and SAR 6 bn (USD 1.6 bn) post-money valuation. “The USD 1.2 bn valuation is anchored in competitive bids from leading regional and international institutions,” the sources tell us.

Why it matters: Over half of Saudi firms find access to finance to be the biggest obstacle to doing business. This perceived bottleneck is driven by an institutional divide: while large, established corporate borrowers are heavily banked, SMEs are being left behind — 60% of small firms struggle to access financing, while only 14% hold an active bank loan, according to a World Bank survey.

What’s next? Expect the bank to tap local and global investors to diversify its shareholder base as it aims to serve 4 mn users ahead of a potential public listing in three years. D360 has attracted 3 mn customers and SAR 3 bn in deposits as of April this year, according to the sources.