Riyadh - Sharikat Mubasher: The Saudi-based investment firm STV launched a new Shariah-compliant nondilutive finance tool to cater to the funding requirements of high-growth ventures, according to the company's press release.

The tool, dubbed NICE (Non-Dilutive Investment in Callable Equity), aims to unlock robust and Shariah-compliant financing without the stringent limitations and restrictive covenants of conventional debt.

NICE is based on callable equity, which gives founders the option to buy back this equity in installments over the maturity period.

As an equity-based tool, NICE will allow startups to invest the capital in the best way they see fit to grow their businesses.

Tabby, the latest unicorn in the Middle East and North Africa (MENA) region, was the first company to receive this non-dilutive financing from STV.

Commenting on NICE, Hosam Arab, CEO and Co-founder of Tabby, stated that the tool unlocked an innovative form of financing to support the growth of the business.

“The instrument offered an efficient cost of capital versus equity and with no recourse or restrictive covenants that we would normally expect with venture or traditional debt instruments,” Arab added.

Along with Tabby, three companies have raised a total of $26 million in NICE funding, including Tenami Capital and YouGotAGift, the eGiftcard marketplace, in addition to promising companies in the pipeline.

STV affirmed its commitment to collaborating with exciting founders and investors with the overall goal of increasing the share of founder-friendly and non-dilutive financing for companies in the region.