Restaurant Financing in Saudi Arabia: SPICE Tests Shariah-Compliant Dining Capitalr

SPICE, the Riyadh-based dining startup founded in 2025, set out its case on Monday for a Shariah-compliant funding structure it calls dining capital, arguing that Saudi Arabia’s premium restaurant sector cannot expand at the pace Vision 2030 demands while operators remain dependent on conventional debt. The Kingdom’s foodservice economy is projected to reach $58.3 billion by 2033, and the gap between that trajectory and the financing available to independent operators is what the company says it exists to close.

“Saudi Arabia’s Vision 2030 is transforming the Kingdom into a global F&B powerhouse, with restaurants and cafés at the heart of that ambition as essential infrastructure for both domestic consumers and international visitors,” said Zeid Husban, CEO and co-founder of SPICE.

The mechanics are straightforward enough. SPICE advances capital to restaurants and cafés for renovations, new sites and marketing, structured so that repayment does not carry the fixed schedule of a conventional loan. On the consumer side, a mobile app returns 20% cashback to diners at funded venues, uncapped and unrestricted, which gives the operator a marketing channel attached to the same capital that paid for the refurbishment.

The financing gap SPICE is addressing is a global one, and the existing answers are expensive

Restaurants everywhere sit awkwardly with conventional lenders. Margins are thin, revenue is volatile week to week, and the collateral is mostly equipment that depreciates. Small business lending data reported by CNBC shows that restaurant owners seeking financing in 2026 are concentrating on equipment upgrades, working capital and expansion, with the average loan across all lender types running between $85,000 and $120,000, which is small enough that traditional underwriting rarely justifies the effort involved.

What has filled that space in mature markets is embedded capital sold through the point-of-sale layer. Toast, whose lending arm draws on customer sales data to predict repayment, has accumulated roughly $1 billion in loan originations, and its product works on a daily holdback against card sales, applied for and received inside the dashboard the operator already uses. Square, DoorDash and a long tail of specialist funders run comparable structures.

The cost is where the model attracts criticism. A merchant cash advance is the purchase of future card receivables, with the funder taking a holdback of between 10% and 25% of daily card sales before the operator sees the money, and the practice of stacking a second advance on top of an outstanding first has become a recognised failure mode. Lending analyses put effective annualised costs on these structures anywhere from 40% to well above 300%, and most agreements require a personal guarantee that puts the owner’s own assets at risk in a default.

Husban explained that the two sides of the problem are connected. “Restaurant operators face real challenges in securing capital to expand and upgrade amid this demand surge, while diners increasingly expect digital returns for their loyalty,” he said.

Saudi dining economics have reached the scale where a dedicated funding product makes commercial sense

The Kingdom now supports an estimated 1,200 premium outlets and around 12,500 cafés and coffee shops, and the MICHELIN Guide to Saudi Arabia recognises 52 restaurants across Riyadh, Jeddah and AlUla. Those formats carry heavy fit-out costs and continuous reinvestment requirements, which is precisely the spending profile that conventional bank lending handles poorly.

Demand is not the constraint. Research cited by SPICE shows that 38% of Saudi nationals eat out with family at least once a week, with coffee and dessert outings settled into the social calendar as regular fixtures. Around 65% of the population is under 35, and 92% of Saudi diners use mobile apps when searching for somewhere new. Typical ticket sizes in the major cities run from SAR 100 to SAR 300 per person, which is high enough for a 20% return to register as meaningful money rather than a token.

Tourism reinforces the picture. Vision 2030 targets a doubling of tourism’s GDP contribution from 5% to 10% by 2030, and the Kingdom welcomed 122 million visitors in 2025, generating approximately SAR 300 billion in tourism spending. In the first quarter of 2025, restaurants and cafés accounted for 29% of all point-of-sale transactions, worth SAR 99 billion.

Islamic finance is where several of the newest fintech structures are being tested first

The Shariah-compliant component is not a regional footnote. Industry estimates drawing on the State of the Global Islamic Economy report put global Islamic finance assets on track to cross $6 trillion by the end of 2026, with Islamic fintech the fastest-growing segment at 3% of total assets and expanding considerably faster than traditional sectors, driven by digital payments, Shariah-compliant buy-now-pay-later products and embedded finance. Coalition Greenwich research shows Islamic banking accounting for roughly 70% of total assets, while Africa and Western markets, though smaller today, are growing quickly on rising demand for Shariah-aligned products.

The structural point is that Islamic finance prohibits interest and favours risk-sharing, which pushes designers toward revenue-linked and asset-backed arrangements rather than fixed-rate debt. Those are the same instincts driving embedded restaurant capital in Boston and San Francisco, reached by a different route. SPICE is one of a growing number of companies working in the overlap.

“SPICE addresses both sides of that equation through Sharia-compliant mechanisms that align incentives across the ecosystem,” Husban added.

SPICE reports that brands working with the platform have seen a 139% increase in visits, a 347% rise in spend per guest, 2.5 times return on food cost credit, and a doubling of loyalty and retention. Those figures come from the company rather than an external auditor, and they describe early cohorts at a business founded last year, so they establish direction rather than durability.

The founding team carries more weight than most first-time operators would. Husban, Wadi Hawi and Yousef Sawalha previously built ifood.jo, acquired by Delivery Hero, and POSRocket, acquired by Foodics. SPICE is their third venture in food and beverage, and the combination of consumer platform experience and restaurant back-office knowledge is the reason the capital and the cashback sit inside a single product rather than two.

The open question for the sector is whether returning diners generate enough incremental revenue to service the advance without the holdback pressure that has caused difficulty elsewhere. If they do, the model travels well beyond Riyadh, into every market where restaurant operators are being asked to invest ahead of demand while their lenders remain unconvinced.