Dubai-based buy now, pay later company Tabby raised $54 million from Sequoia Capital India and Saudi Arabia’s STV as it seeks to expand its operations globally.
Existing investors Mubadala Investment Capital, Arbor Ventures and Global Founders Capital also participated in the company’s extended funding round, which began last year, Tabby said on Monday.
Tabby raised $50m in debt financing last June in an initial venture capital funding round also led by Arbor Ventures and Mubadala Capital.
The new funding will also help the company to expand its consumer product offering.
“The rapid adoption we continue to see today shows the urgency of consumer demand for flexible and honest payment experiences over predatory interest-driven credit,” said chief executive and co-founder Hosam Arab.
The BNPL business model, which allows consumers to make online purchases instantly and spread their payments out over interest-free instalments, has boomed since the onset of the Covid-19 pandemic.
The industry is expected to grow 10 to 15 times by 2025 worldwide, topping $1 trillion in annual gross merchandise volume by some estimates, according to a report by New York data research consultancy CB Insights.
Tabby’s platform went live in February 2020 and has since signed agreements with more than 3,000 global brands and small businesses, including Adidas, Ikea, Bloomingdale’s, Marks & Spencer, Home Centre and Toys R Us.
Tabby has more than 1.1 million active shoppers in Saudi Arabia and the UAE. The company has so far raised more than $180m in debt and equity, which includes $150m it raised last year.
Tabby has built a “strong, customer-first and market-leading” BNPL business in Saudi Arabia and the UAE, said G V Ravishankar, Sequoia’s manager director.
“We are excited to join their journey as they continue to build a consumer-focused financial services business across the region.”
Last summer, the start-up introduced a loyalty programme that rewards customers with physical cash that they can either use to fund new purchases, settle future payments or transfer to their bank accounts.
Customers can earn up to 20 per cent cashback after purchasing items from the platform's retail partners.
“We are strong believers that the company will continue spearheading BNPL's growth across the region, fuelled by the rapid switch to digital payments, e-commerce growth and remarkable product vision and team,” said Ahmad Alshammari, partner at STV.
Online retailers using Tabby's payment solution have suffered a more than 10 percentage point decline in the use of cash on delivery by their customers.
