RIYADH- Saudi Arabia's digital marketplace Sary, which connects small businesses with merchant wholesalers, has secured $6.6 million in financing to boost expansion as coronavirus-driven demand for essential goods boosts appetite for its services.

Under an ambitious reform drive led by Crown Prince Mohammed bin Salman to diversify the economy away from oil, Riyadh plans to boost small and medium enterprises' (SMEs) contribution to GDP to 35% by 2030, from a current 20%.

Young Saudis have rushed to start small businesses, backed by new technologies and digital infrastructure and many of these are now flourishing as people rely heavily on online apps with curfews and lockdowns imposed in many cities.

Sary has two hubs in Dammam and Jeddah and plans to use the "Series A" funding, led by early-stage venture capital fund Raed Ventures, to open a third in Riyadh, allowing it to distribute to 25 cities across the kingdom, said the startup's chief executive Mohammed Aldossary.

"We mainly focus on the micro and small enterprises, but because of coronavirus a lot of medium-sized enterprises and supermarket chains have decided to adopt our technology," Aldossary told Reuters in a phone interview.

"In March we made sales equal to 50% of what we did in 2019. There is a huge surge in retail sales, and we are on track to do sales worth 1 billion riyals this year," he said.

Saudi Arabia has ordered the closure of malls, restaurants, coffee shops and other public spaces to combat the virus, boosting online business opportunities for large retailers.

Danube online, one of Saudi Arabia's biggest supermarket chains, told Reuters last week that average daily sales in the 10 days to March 26 were up over 200% and average order value was up 50%.

Meanwhile, grocery and commodities delivery firm Nana said it had raised $18 million to bolster growth.

While big businesses are cash-abundant and well-equipped to seize growth potentials, micro and small businesses -- including hotels, restaurants and cafes -- have shifted to Sary's platform to secure purchases after seeing huge declines in demand and being forced to cut jobs, including procurement, Aldossary said.

(Reporting by Marwa Rashad; Editing by Kirsten Donovan) ((marwa.rashad@thomsonreuters.com; +966114868476; Reuters Messaging: marwa.rashad.thomsonreuters.com@reuters.net))