FTI advises e& on acquisition of SME lending platform Beehive

17 May 2023 Consultancy-me.com 3 min. read

In its second deal in the space of three months, telecommunications company etisalat by e& (e&) has acquired a majority stake in Beehive, a UAE-based crowdfunding and SME lending platform. FTI Capital Advisors provided buy-side M&A advisory services.

Hot on the heels of the purchase of ServiceMarket (announced in March), e& has put its financial muscle to work to beef up its offerings in the financial services domain. To close the deal, the Emirati-based multinational once again turned to consultants from FTI Capital Advisors, the investment banking arm of FTI Consulting.

Founded in 2014, Beehive leads the crowdfunding platform space in the UAE and also has operations in Saudi Arabia and Oman. According to its own records, the company has since its inception facilitated AED1.5 billion worth of loans.

FTI advises e& on acquisition of SME lending platform Beehive

Beehive will be integrated into e& enterprise, e&’s digital transformation subsidiary (formerly Etisalat Digital). Terms and conditions of the deal have not been disclosed.

Salvador Anglada, CEO of e& enterprise, commented: “The acquisition of Beehive marks the second step in e& enterprise’s journey in the fintech space after the launch of UAE Trade Connect in 2021. SMEs are important drivers of the economy, and there is a need more than ever to support their unique financing needs. With Beehive, we have the right technological innovation to accelerate our agenda in the UAE and beyond.”

SMEs make up around 95% of all companies operating in the UAE. They also employ around 90% of the private sector and contribute more than 60% to the country’s GDP, according to the UAE government.

However, the segment’s financing needs remains underserved by large banks, mostly due to their lower financing requirements and risk profiles. Estimates from Deloitte suggest that UAE-based SMEs face a credit gap of around $250 billion.

“The SME portfolio is historically perceived by banks as high risk due to lack of transparency and inefficiencies in global trade. Small businesses often lack the sophisticated skills and capacity that the large corporates enjoy”, explained Sinan Ozcan, senior executive officer of Dubai-based DP World Financial Services.

This is where e& enterprise wants to make a difference. “SMEs are important drivers of the economy and there is a need more than ever to support their unique financing needs,” said Anglada.

Meanwhile, for Beehive, the joining of forces with the global player “presents a huge opportunity to increase our offerings, invest in technology, and accelerate financing to SMEs across the region,” said Craig Moore, founder and chief executive of Beehive.

Reflecting on the firm’s M&A support, Fede Membrillera (Senior Managing Director at FTI Capital Advisors) said: “Through this transaction e& has demonstrated its commitment to expanding in the fintech space to support the financing needs of SMEs. We are pleased to have had the opportunity to leverage our decade of M&A experience in the fintech space to support e&’s strategic objectives.”

According to ConsultancyME’s benchmark of dealmakers, FTI Consulting – including subsidiary FTI Capital Advisors – ranks as one of the Middle East’s leading consulting firms for M&A services.