In a landmark move for the region’s financial ecosystem, Sukna Capital has secured approval from Saudi Arabia’s Capital Market Authority (CMA) to launch the Sukna Fund for Direct Financing (SFDF), the Kingdom’s first open-ended, Sharia-compliant direct lending fund.
This regulatory milestone signals a growing shift in the MENA region’s approach to non-bank institutional financing.
Structured as an alternative investment vehicle, the SFDF provides scalable, non-dilutive capital to small and medium-sized enterprises (SMEs) while offering institutional investors a new gateway to private credit.
Unlike conventional private lending structures with long lock-up periods, the open-ended nature of the fund allows periodic liquidity, enabling investors to enter and exit at regular intervals.
For high-growth businesses, this unlocks access to asset-backed capital without the burden of equity dilution.
Sukna: A New Era of SME Financing
Fares Bardeesi, CEO of Sukna Capital, described the launch as a pivotal moment for both Sukna and the broader SME sector. “As of Q3 2024, SME lending in Saudi Arabia stands at SAR 329.23 billion—just 9.1% of total bank credit, well below the Vision 2030 target of 15–20 percent,” Bardeesi explained.
“SFDF is designed to address that gap through institutional, regulator-aligned capital solutions tailored to the needs of high-potential businesses across sectors.”
With over two decades of corporate finance and investment experience, Bardeesi has led transactions worth more than USD 6.5 billion, particularly across real estate, healthcare, and technology.
He also co-founded Sukna Ventures, the firm’s tech-focused arm, which has made bold bets on high-growth digital startups in sectors like logistics, mobility, and online marketplaces.
The fund will target SMEs across a range of traditional and innovation-driven industries that are underserved by conventional bank lending structures.
By providing debt capital aligned with Islamic finance principles, Sukna aims to support Saudi Arabia’s Vision 2030 goals while empowering founders to scale on their own terms.
Bridging the Capital Gap for Startups
Waleed Alballaa, Managing Partner of Sukna Ventures and member of the SFDF Investment Committee, underscored the importance of this shift in timing and structure.
“The tech and startup ecosystem has matured significantly, but financing structures simply haven’t caught up,” he said. “We designed SFDF to meet founders where they are—with the right capital, at the right time, and without the red tape.”
With deep roots in both Silicon Valley and Saudi Arabia, Alballaa brings a uniquely founder-centric perspective to the fund.
His background spans two decades across operations, technology, and venture capital, including launching multiple investment vehicles and serving on the boards of regional tech leaders.
In addition to its investor-friendly structure, SFDF will also leverage Sukna’s proprietary technology platform to streamline loan origination, credit risk analysis, portfolio monitoring, and investor reporting—ensuring a scalable and transparent experience for both lenders and borrowers.
A Catalyst for Regional Private Debt Markets
The launch of SFDF is expected to have ripple effects across the region’s alternative financing landscape, particularly as governments and regulators push to diversify sources of capital and reduce reliance on traditional banking channels.
Sukna’s offering is one of the clearest signs yet that institutional direct lending—long underrepresented in the region—is poised for rapid growth.
With regulatory backing, tech-enabled infrastructure, and deep operational expertise, Sukna Capital is betting that SFDF can become a model for how institutional debt capital is deployed across high-growth, founder-led businesses in the Gulf.
