RIYADH: Tabby, the leading buy now, pay later (BNPL) provider in Saudi Arabia and the UAE has raised $50 million in a new equity round valuing the company at $300 million.
Global Founders Capital and STV led the funding round, with participation from Delivery Hero and CCVA. Existing investors, including Arbor Ventures, Mubadala Investment Capital, Raed Ventures, Global Ventures, MSA Capital, VentureSouq, Outliers VC, JIMCO, and HOF, also participated.
This comes one month after the firm raised $50 million in debt financing bringing its total funding to over $130 million in less than two years.
The fintech firm’s Series B financing will be used to expand its product portfolio and enter new markets.
The funding will help tabby further service the growing demand for its BNPL products as customer usage continues to soar, especially in Saudi Arabia, the firm’s largest market.
Ahmad Al-Shammari, a partner at STV, said: “As the global BNPL market is expected to grow at 30 percent CAGR over the next five years, we estimate that MENA will grow at least twice as fast, further accelerated by a rapid switch to contactless payments, e-commerce growth, and access to credit.”
Financial technology startups in Saudi Arabia and the UAE offering online short-term credit say they are enjoying exponential growth as the coronavirus pandemic drives a shift in consumer spending online.
BNPL purchasing is relatively new to the region where consumers have traditionally been skeptical of paying for goods before getting them.
But Saudi-based Tamara and UAE’s Spotii, Tabby, and Postpay all say the take-up has far exceeded initial expectations. And investors are paying attention. Tamara recently raised $110 million in debt and equity, a large amount for an early-stage Middle East startup.
“With global players consolidating the MENA BNPL space, we are proud to continue building a local business and work with investors who understand its value. This investment will enable us to deliver the most rewarding and relevant shopping experience for regional consumers and retailers,” said Hosam Arab, CEO, and co-founder of the fintech firm.
This investment marks Delivery Hero’s first fintech investment in MENA. Delivery Hero, which owns and operates several regional food and grocery delivery companies including Talabat, InstaShop, and Hunger Station, has one of the largest customer bases in the Middle East and Africa (MENA) region.
“We are excited to be investing in tabby as our first FinTech investment in MENA, a strategically important region for Delivery Hero. We see great potential in tabby to drive the industry forward and are proud to be supporting the company on its growth journey,” Mark Venema, senior vice president, strategy at Delivery Hero, said.