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Is ‘buy now, pay later’ the future for Gulf digital payments?

According to Arabian Business News; Tabby, the UAE, and Saudi-based fintech provider have announced that it has raised Series A financing of $23 million in debt and equity led by Arbor Ventures and Mubadala Capital.

STV, Raed Ventures, Global Founders Capital, JIMCO, Global Ventures, Venture Souq, Outliers VC, MSA Capital, HOF, and Arab Bank also took part in the funding round which will fuel the company’s next stage of growth.

Founded in 2019, Tabby partners with retailers to offer customers online or in-store the ability to defer paying for their purchases for up to 30 days or to pay in four equal monthly installments at zero cost to the consumer.

UAE shoppers taking advantage of ‘buy now, pay later’ platforms

 

Today, Tabby’s customers are able to use its service across more than 500 merchants, including leading 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, the managing partner at Arbor Ventures, said: “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 the best in market solutions for merchants and new frictionless payments for consumers.”

Ibrahim Ajami, head of ventures at Mubadala added: “Buy-now-pay-later solutions are booming globally thanks to accelerated payments digitisation 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.”

According to a report by Kearney Middle East, the average share of GCC households that have bought goods online has reached over 8 percent in 2020. Given the range in developed markets sits at 16 to 25 percent, there is significant room for growth.

Hosam Arab, co-founder, and CEO of Tabby said: “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 percent and boost transaction sizes anywhere from 30 to 85 percent, by providing consumers with access to zero-cost, real-time credit.

The latest round of financing comes after Tabby announced a partnership with Visa and joined the Saudi Arabian Central Bank’s regulatory sandbox.

 



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