In a pre-Series A funding round concluded on February 18, 2026, Madfu, a Saudi-based BNPL provider, secured USD 25.5 million in investment led by Afaq Capital and supported by angel investors.
Founded by Abdullah Al-Ibrahim, Ahmed Al-Wusheel, and Anas Al-Shaqir in 2022, Madfu offers interest-free payment solutions allowing consumers to split purchases into up to six instalments without additional fees. The company operates under a licence granted by the Saudi Central Bank.
Madfu’s technology seamlessly integrates with merchant systems, ensuring compliance with Islamic finance guidelines and regulatory standards while enhancing digital checkout experiences. The service is aimed at boosting affordability, conversion rates, and customer loyalty for both consumers and merchants.
Funding to Facilitate Merchant Network Expansion
The raised capital will be used to expand Madfu’s merchant network across Saudi Arabia. The company intends to strengthen its operational infrastructure, optimize its technology stack, and invest in product development for Sharia-compliant financial solutions tailored to the evolving needs of consumers.
In Saudi Arabia, BNPL services have seen rapid growth fueled by e-commerce expansion and changes in payment preferences as part of Vision 2030’s economic diversification plans. The fintech sector operates within a regulatory framework overseen by the Saudi Central Bank, which requires licensing for consumer credit and payment services.
Islamic finance principles prohibit interest charges on loans, necessitating BNPL providers to structure their offerings around fee-based or profit-sharing models rather than interest-bearing credit. Sharia-compliant financial products must be certified by Islamic scholars to confirm compliance with religious law.
Regulatory Environment and Market Dynamics
The Saudi Central Bank regulates consumer credit providers through licensing that addresses consumer protection, credit underwriting standards, and financial stability. BNPL providers must show sufficient capital, robust risk management frameworks, and operational capabilities to gain authorization.
Following the pandemic-driven shift towards digital adoption, e-commerce in Saudi Arabia has grown significantly, with online retail making up an increasing portion of overall consumer spending. BNPL services help increase average order values and reduce cart abandonment for merchants while offering payment flexibility to consumers.
Afaq Capital operates as a multi-sector investment firm focused on the Saudi market. Its involvement underscores institutional investor interest in fintech companies catering to consumer finance segments within the kingdom.
Following this funding round, Madfu has not disclosed details about its transaction volumes, merchant numbers, or customer base size but intends to utilize the funds for growth initiatives throughout 2026.
