Buy Now Pay Later (BNPL) FinTech company tabby raises $23 million

By Edil Corneille

Dubai-based Buy Now Pay Later (BNPL) FinTech company – tabby, announced the raise of $23 million in debt and equity in its Series A financing led by Arbor Ventures and Mubadala Capital, and with participation from STV, Raed Ventures, Global Founders Capital, JIMCO, Global Ventures, Venture Souq, Outliers VC, MSA Capital, HOF and Arab Bank. The funding will fuel the next stage of growth of the company and help it materially scale its product and engineering capabilities in addition to its lending capacity.

Founded in 2019, tabby partners with retailers to offer their customers online or in-store the ability to defer paying for their purchases for up to 30 days or to pay in 4 equal monthly installments at zero cost to the consumer. Today, tabby’s customers are able to use its service across more than 500 integrated merchants including global brands like IKEA, Toys R Us and Ace Hardware and regional retail giants including Al Futtaim Group, Landmark Group and Apparel Group.

Melissa Guzy, Managing Partner at Arbor Ventures enthused, “We are very excited to have backed tabby, the leader in Buy Now Pay Later in MENA which is at a tipping point in digital payments. tabby’s network is expanding rapidly, and the company continues to innovate to offer best in market solutions for merchants and new frictionless payments for consumers.”

Ibrahim Ajami, Head of Ventures at Mubadala enunciated, “Buy-now-pay-later solutions are booming globally thanks to accelerated payments digitization and e-commerce penetration, and the Middle East is no exception. tabby’s solution fits squarely within our thesis that fintech solutions will drive better experiences for merchants and consumers. We are excited to partner with Hosam and his team as they build tabby into a regional fintech leader.”

tabby has managed to capitalize on three key COVID-driven trends that have helped fuel its growth: the dwindling availability of consumer credit, the adoption of contactless payments by consumers, and the rapid retail shift online.

tabby integrates directly into merchant checkouts or POS systems, instantly providing consumers with a way to pay for their purchases with only 25 per cent of the transaction value paid at the time of purchase and the remainder automatically charged over 3 monthly installments. tabby does not charge its customers any interest or fees as long as they pay on time and monetizes primarily by charging merchants a commission on sales generated via its platform.

Hosam Arab, co-Founder and CEO of tabby elucidated, “The shift to online retail has never been more evident, and with it, consumers are becoming ever more demanding as they actively seek convenience and reliability in their shopping experience. And this includes how they pay for their purchases. We’re very proud of the value we’ve been able to bring our retail partners by providing their customers with an exceptionally convenient and flexible way to pay.”

The company says the integration of its payment service can increase conversion rates by over 20 per cent and boost transaction sizes anywhere from 30 to 85 per cent, by providing consumers with access to zero-cost, real-time credit. Moreover, tabby says it has helped online retailers convert a growing share of their customers from paying in cash to paying digitally due to the value proposition of interest-free installments. This round of financing comes after tabby announced a partnership with Visa and joined the Saudi Arabian Central Bank’s regulatory sandbox.