Zelo eFunder Model and the Transformation of SME Financing in the UAE

Small and medium enterprises (SMEs) are the backbone of the United Arab Emirates’ economy, yet they have historically faced a massive hurdle: the funding gap. Traditional banking systems often move too slowly for the fast-paced needs of modern startups and digital merchants. This friction created a market opportunity for fintech innovators to provide faster, more flexible liquidity.

One company has emerged as a central player in this transformation. Originally launched as eFunder.ai, the platform recently underwent a major evolution into Zelo following its acquisition by the International Holding Company (IHC). This shift marks a significant milestone for the UAE’s fintech ecosystem, signaling a move toward more institutionalized, tech-driven credit solutions for businesses.

eFunder’s Emergence as a Response to SME Financing Constraints

The story began in 2020 when Siddhartha Agarwal founded Funder.ai (later known as eFunder) in Abu Dhabi. The company was born out of a specific need to service SMEs that were performing well but struggling with cash flow. In many industries, businesses must wait 60 to 90 days to receive payments for their invoices, which can starve a growing company of the capital it needs to stay afloat.

SMEs increasingly rely on online platforms to scale, but collecting receivables remains time-consuming. In a “cash-starved” environment, waiting months for a payout can lead to a major crisis, preventing businesses from launching new products or securing inventory deals. eFunder was designed to digitize the traditional “factoring” service, allowing businesses to access cash against their pending invoices at the click of a button.

By integrating machine learning into its risk assessment engine, the platform began providing capital based on actual performance rather than just credit history. This was a radical departure from the “one-size-fits-all” approach of traditional lenders.

How a UAE Fintech Went Big After Joining IHC?

A pivotal moment in the company’s timeline occurred on July 16, 2025, when it was officially acquired by IHC (International Holding Company). Following this acquisition, the platform was rebranded as Zelo. This move integrated the fintech’s agile technology with the massive scale and resources of one of the UAE’s largest conglomerates.

The rebranding to Zelo represents more than just a name change; it reflects an expanded mission to bridge the SME funding gap on a larger scale. Today, Zelo operates as a brand under Funder.AI Technologies Limited, which remains a private company limited by shares and headquartered in the Abu Dhabi Global Market (ADGM).

The backing of IHC has allowed the platform to scale its operations significantly. As of 2026, the platform has financed over USD 200 million across more than 9,500 transactions. Businesses should pay close attention to these changes, as they indicate a maturing market for alternative finance in the Middle East.

Also Read: Veneeth Purushotaman’s Leadership And Strategy at Aster DM Healthcare

The Zelo Business Model and Digital Factoring

Zelo identifies as a “human-first fintech” that functions as a partner in growth rather than a traditional lender. The core of its offering is Invoice Financing, also known as digital factoring. This process allows a business to turn its unpaid invoices into instant capital.

The process is designed for speed and convenience:

• 24-Hour Funding: Once an account is integrated, businesses can receive capital within a single business day.
• Fully Digital Onboarding: There is no paperwork or need for in-person visits; users upload invoices and the system handles the rest.
• Flexible Drawdowns: Businesses only draw down what they need, avoiding fixed EMIs or unnecessary interest on unused funds.
• No Collateral Required: Invoice financing is typically provided without the need for physical assets as security.

How does the pricing work? Zelo uses a daily pricing model, meaning if a buyer pays an invoice in 40 days, the SME only pays for those 40 days. For e-commerce sellers, the fee is typically between 0.05% and 0.08% per day. This transparency is a key differentiator from traditional banking fees that often include hidden setup costs or origination fees.

E-Commerce Friendly Financing for Marketplace Sellers

One of Zelo’s most successful verticals is its dedicated support for e-commerce merchants. 

The company provides specialized solutions for sellers on major platforms including:

• Amazon (UAE, US, UK, Canada, and Saudi Arabia).
• Noon.
• Talabat.

Deepak Sekar, CEO of Zelo, has frequently shared strategies for scaling e-commerce businesses in the UAE market, emphasizing the importance of managing inventory cycles. For many online brands, waiting for payouts from a marketplace like Amazon can hold back growth. Zelo’s “Instant Pay” solution for marketplace sellers allows them to receive funds as soon as they ship their products.

To qualify for daily cash advances on Amazon, sellers typically need three months of sales history. For larger monthly working capital advances, six months of history is required. The platform advances up to 80% of the total balance, net of refunds and marketplace charges.

Could this be the catalyst that allows smaller UAE brands to compete with global giants? By turning sales into immediate liquidity, these businesses can bulk up inventory and launch new product lines without waiting for the next payout cycle.

How Different UAE Sectors Benefit from Zelo’s Cash Flow Solutions?

The impact of Zelo’s financing model is evident across a variety of sectors beyond just retail. Case studies and testimonials highlight how different businesses use these funds to overcome specific operational hurdles:

1. Engineering and Construction

In the construction sector, capital is often locked in unpaid invoices for months while projects are ongoing. One mid-sized contracting company reported that after using Zelo, they were able to launch three parallel projects compared to just one prior to receiving funding support.

2. Logistics and B2B Trading

A logistics firm managed to reduce its Days Sales Outstanding (DSO) from 98 days to just 21 days by using invoice financing. Meanwhile, an oil trading company with an AED 160 million turnover used the platform to unlock capital from shipment invoices within 48 hours, allowing them to increase their trading volume without stressing over delayed payments.

3. Healthcare and Professional Services

A healthcare provider saw a 19% year-on-year sales growth after unlocking tied-up capital. In the consulting sector, a boutique firm used advanced fees on government contracts to focus on delivering work rather than worrying about payroll. One consulting firm successfully funded AED 2.2 million across 18 B2B invoices within just two months.

Interesting Article: UAE’s Digital Revolution Is Forcing Businesses to Adapt – Or Fall Behind

ADGM and FSRA in Zelo’s Growth 

A critical factor in Zelo’s success is its regulatory status. The company is licensed and regulated by the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM). It holds a Category 4 license to operate a Private Financing Platform.

Being regulated in a Tier-1 financial center like ADGM provides several advantages:

• Transparency and Governance: The license ensures the firm adheres to strict international standards for client protection.
• Operational Limits: Under its current stipulations, the firm is permitted to deal with a specific number of PFP (Private Financing Platform) clients and prospects, with increases requiring FSRA approval.
• Institutional Trust: Regulation under the FSRA gives partners and large buyer ecosystems the confidence to transact through the platform.

Zelo’s physical presence is also deeply rooted in the Abu Dhabi tech scene, with offices located at Hub71 in Al Khatem Tower, Maryah Island. Hub71 is a global tech ecosystem that has provided the company with support and networking opportunities as it grew from a startup into an IHC group company.

Can Zelo Beat Global Fintech Giants?

While Zelo is a leader in the UAE, it operates in a crowded global field of “alternative lending” and “invoice financing” platforms. According to market data, Zelo (as Funder.ai) ranks 29th among 93 active competitors globally.

Top international competitors include:

• Outgo: A US-based platform focused on invoice management.
• Drip Capital: A Series C funded company based in the US and India, specializing in trade financing.
• Receivables Exchange of India: A major player in the MSME trade receivables space.

Despite the competition, Zelo’s deep integration with the UAE’s specific buyer ecosystems—such as the local construction, oil and gas, and e-commerce sectors—gives it a localized advantage. The acquisition by IHC further solidifies its position, as it can now leverage the group’s extensive network of subsidiaries and partners to find new “buyer ecosystems” to finance.

Will Zelo Maintain Its Fintech Lead? 

Despite its rapid growth, Zelo faces the same challenges as any financial institution. Managing the risk of non-payment by the “buyers” (the companies that owe the SMEs money) is the primary concern for any factoring business. Zelo mitigates this through its automated risk assessment engine, but market-wide economic shifts can still impact receivables.

Another challenge is the competitive pressure from traditional banks that are slowly digitizing their own SME offerings. However, Zelo’s ability to offer collateral-free and performance-based financing remains a significant hurdle for traditional banks to clear.

Looking toward the future, Zelo is expanding its product line. One upcoming product is Financing for Bank Guarantees. This will facilitate the issuance of performance bonds and advance payment bonds through First Abu Dhabi Bank (FAB) with minimal cash margins (as low as 30%). This could shape the market in the coming months, particularly for contractors who often have to tie up large amounts of cash in bank guarantees to win projects.

What the Future of UAE Fintech Looks Like After Zelo?

The evolution from eFunder to Zelo is a blueprint for the future of fintech in the region. We are likely to see:

1. More Consolidation: Larger conglomerates like IHC will continue to acquire agile fintechs to modernize their service offerings.
2. Embedded Finance: Financing will become more “embedded” into the tools businesses already use, such as ERP systems and marketplace dashboards.
3. Sector-Specific Solutions: Financing won’t be generic; it will be tailored to the specific cash flow cycles of niches like logistics, healthcare, and digital retail.

As the UAE continues its push for economic diversification and SME growth, platforms like Zelo will play an increasingly vital role in ensuring that capital flows where it is needed most.

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