Tabby raises $200 million to become MENA’s first fintech unicorn

🦄 Ladies and gentlemen, here’s Tabby! The Saudi-based fintech specialising in 'buy now, pay later' (BNPL) services, has become MENA’s first fintech unicorn, hitting a $1.5 billion valuation after a $200 million Series D funding round.

• Co-founded by Hosam Arab and Daniil Barkalov in the UAE in 2019, an IPO on Tadawul is on the horizon.

💰 Investor lowdown: Wellington Management spearheaded the funding round, complemented by contributions from growth equity firm Bluepool Capital, alongside continued support from previous investors STV, Mubadala Investment Capital, PayPal Ventures, and Arbor Ventures.

• This is coming less than a year after Tabby’s $58 million Series C round led by Sequoia Capital India and STV.

💻 Solving spending woes: 

Okay, so first things first, let’s dive into how Tabby works:

1. 🛍️ Shop til you drop with one of Tabby’s 30,000 partner brands 
2. 💸 Pay 25% upfront at the checkout
3. 💳 And the rest in 3 more monthly payments without interest

Sounds great for the customer but how does Tabby make money in all of this?

• They turn a profit by charging retailers, not shoppers, for offering a better shopping experience.

With $6 billion in annual transaction volume, and over 10 million users in Saudi Arabia, UAE, and Kuwait, suffice to say they’re on the something big.

📈 Turning a profit: 

Unlike BNPL providers in the US and Europe who often face losses (Klarna 👀), Tabby is actually profitable in the GCC.

Why? Fewer credit options, makes BNPL not just convenient but essential.

• In Saudi Arabia, only 15% of people have credit cards, compared to 40% in the UAE and 10% across the GCC.

Another reason? Quick recognition of mismatched market conditions. 

Tabby evaluates markets based on e-commerce size, credit card penetration, and consumer purchasing power before entering.

• This explains its recent strategic exit from Egypt only 6 months after entering.

🐴 Not just a one trick pony

And they’re not resting on their laurels:

• Tabby Cards are now used in over 4,000 UAE stores, making up 20% of Tabby's total transactions.
• Additionally, Tabby Shop has launched, aggregating 500,000+ products for easy shopping and deal discovery.

🚀 Flash forward 

Looking forward, Tabby plans to expand its market presence, offering new credit options and broadening its financial services to include things like payments and savings for enhanced customer financial well-being