Consumer demand for credit options varies across regions, and for Fintech, understanding these differences is key to survival. In developed countries where credit cards are common, consumers look to buy now and pay aggressively later for flexible installment options.
However, in emerging markets like the Middle East where credit card penetration is low but high payouts, BNPL has even more convincing use cases. The model is strong enough that Tabby, one of the region’s pioneers, has secured $160 million in the Series E round at a $3.3 billion valuation, and has become the most valuable fintech in MENA. It has gained traction.
Growth Equity Investor Blue Pool Capital and Investment Management Firm Hassana Investment Company is a joint leader in fundraising. Saudi investors STV and Wellington executives also participated.
The round comes within 18 months when Tabby raised $200 million in the Series D round, valued at $1.5 billion. Since then, Tabby has said it has made money, but its valuation and annual trading volume have doubled, and now it’s over $10 billion.
“When we doubled our volume, our business profitability increased significantly,” Tabby co-founder and CEO Hosam Arab tells TechCrunch. He attributes this growth to new product launches, which has led to increased usage. “Customers are e-commerce or [point-of-sale] Expenses. Now, especially in the UAE, tabby sees it as a tool to manage all your spending, whether you buy coffee or ride an Uber,” he adds.
Move to a wider range of financial services
Originally focused on online trading, Tabby later expanded to in-store payments and then expanded deeply into retail and financial services. Tabby cards provide users with flexibility in using it, and Tabby Plus offers a subscription-based rewards program. Meanwhile, Tabby Shop offers long-term payment plans to help users access better deals.
Supporting over 40,000 brands and merchants including Amazon, Adidas, Ikea, Samsung and noon, Riyadh-Headquarted Fintech helped expand its product line. Kuwait has increased by 50% since October 2023.
Tabby doesn’t stop at credits. Last year, it acquired Tweeq, a Saudi Arabia-based digital wallet provider. This expanded services tailored to the country’s push for cashless economy as part of its plans to expand to a wider range of financial services, including digital accounts, payments and money management tools.
Furthermore, on the roadmap, Tabby focuses on remittances, an area where there is already a strong position. With Saudi Arabia and the United Arab Emirates one of the world’s largest remittance markets, Tabby’s customer base (comprised of foreigners) offers natural opportunities.
Although Arabs refuse to share certain details, Tabby can first target the UAE and Indian corridors, one of the busiest transfer routes in the world. He notes that flexibility is important in providing Tabby’s money transfer services. Unlike traditional remittance providers, FinTech plans to allow users to split their remittances over time. This is an option offered by a small number of competitors.
Brewing competition and IPO planning
Tabby is regionally competing with Tamara, supported by Coatue in the BNPL space. The remittance will face new competition with global players like UK-based Neobank’s Revolut, which announced plans to enter the UAE’s $44 billion market last September.
However, Arab has accumulated Tabby as one of the region’s largest financial services platforms, with a large customer base and large merchant network, as one of the region’s largest financial services platforms, and the scale, We believe that local market expertise, trusted brands and deep customer relationships are accumulated.
On the IPO front, this series E-round might be Tabby’s last private pay raise before it’s released in the Saudi Arabian exchange. That was to be the case during Series D, but market conditions may have delayed those plans.
“We are opportunistic with the funding round,” says the Arab. “This was a good discussion with the right partner at the right time, so we decided to raise it right now. That said, our IPO plans have not changed. We’ve got a lot of effort into it. I’m taking it seriously and rarely raise another private round unless the market changes dramatically.”
Investor demand for MENA’s Tech IPO is growing. Tarabato’s large listing in Dubai last year showed the region’s appetite for growth startups. Meanwhile, Klarna’s forecast IPO in April will serve as a bell for BNPL companies, indicating that the sector is on the way ahead. (As already, Amazon has announced plans to buy Indian player Axio.)
But for now, Tabby, which has raised over $1 billion in equity and debt, is focusing on expanding its financial ecosystem. When the time comes, it aims to become the region’s next major technology list. Fintech, which moved its headquarters from Dubai to Riyadh for this purpose, has hired three banks to work on the transaction for this purpose.
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