Dubai-based BNPL platform Tabby has acquired an additional $54 million in an extension round following a Series B round that saw the company raise $50 million.
The initial Series B round announced in August last year and valued the company at $300 million was co-led by STV and Global Founders Capital, and saw the participation of other investors. The extension round was co-led by Sequoia Capital India and STV and saw the participation of existing investors such as Global Founders Capital, Arbor Ventures and Mubadala Investment Capital.
Following the extension round, the total funds raised by the company in its Series B round is $104 million. Tabby is one of the highest-valued startups in the Middle East and North Africa (MENA) region. The new funding will be channelled into increasing its product offerings for consumers as well as expanding across borders.
Tabby allows users to shop, pay for their shopping later and earn cash from more than 3,000 global brands that it partners with. Some of the big names it partners with include IKEA, Bloomingdale, Spotti, PostPay, Adidas, etc.
Tabby’s co-founder and CEO Hosam Arab claims that the company has seen a growth of 8X in transaction volume from when it first announced its Series B round in August and now. He also added that the company has seen a growth of 50X between 2020 and 2021. The startup’s major markets are in Saudia Arabia and the UAE with the former having the bigger share of its sales and operations as a result of a high rate of consumer adoptions and increasing online transactions.
Hosam Arab also claims that although BNPL services are less widespread in the MENA region, the adoption rate seems to be better than what is being seen in developed markets. To buttress his point, he said that upon launch with a new retailer, the startup witnesses about 20 percent of the retailers’ consumers going for BNPL as their first choice of checkout. He also says that this grows with time to between 30 percent to 40 percent.
Tabby boasts of more than 1.1 million active users with over 3,000 brands monthly. It says that these users push over 3 million clicks to its partners, and retailers who use tabby as their payment solution have witnessed more than 10 percent decline in the usage of cash on delivery by their customers.
Hosam Arab explained that “The reason I think we see this is the fact that we’re not only displacing credit card transactions in our market, but we’re displacing a much bigger consumer spend, which is cash. Around 70 to 80% of online transactions are cash-based, and when we provide the consumer with this type of payment method, they have adopted it with open arms. So that’s one of the primary drivers we believe for the rapid growth that we’ve seen is that the adoption in our market exceeds that in any other market that we’ve looked at globally.”
“Consumer-centric digital financial services provided real-time and without friction can unlock the growth of commerce and benefit the ecosystem as a whole. We continue to remain bullish on businesses that can do so at scale. Hosam, Daniil and the team at tabby have built a strong, customer-first and market-leading BNPL business in Saudi Arabia and the UAE, and we’re excited to join their journey as they continue to build a consumer-focused financial services business across the region,” GV Ravishankar, the manager director of Sequoia India, said in a statement.
Tabby has raised almost $185 million in debt and equity since it launched three years ago.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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