Wamda has invested in UAE-based financial technology (fintech) startup Tabby, a platform leveraging proprietary technology to improve current inefficiencies in the Middle East and North Africa (Mena) payment landscape. The platform offers consumers the option to ‘buy now and pay later’ or to pay in multiple installments for goods bought online. Wamda’s investment is part of Tabby’s $2 million seed round led by Global Founders Capital, with backers including Arbor Ventures among other investors.
Founded by Hosam Arab, previously co-founder and chief executive officer (CEO) of online retail site Namshi, Tabby (Tabby.ai) aims to provide consumers across the UAE and Saudi Arabia with the flexibility to pay for their online and offline purchases either in a single payment at a later date or in multiple installments. Tabby allows customers to complete their purchase without the need to enter their credit or debit card details and thus aims to become a serious alternative to cash-on-delivery (COD) or cash payments altogether.
The Mena region is the fastest-growing region for e-commerce globally, with the UAE boasting impressive online transaction figures averaging at $144 per purchase, as outlined by Visa in a study published earlier in 2019. Yet COD remains the preferred option for the majority of online shoppers. According to a recent study by Google and Bain & Company, 62 per cent of the region’s online shoppers still prefer COD over other options when buying online. For merchants, on the other hand, COD comes with a hefty price tag and often translates into a higher risk of packages being returned.
“We're excited to be launching a Buy Now Pay Later business that provides great value to consumers, retailers and financial institutions while addressing the government's goals of growing non-cash transactions in their economies,” said Hosam Arab, chief executive officer (CEO) of Tabby.
Tabby is currently integrating its technology solution with a number of large retail merchants in the region and will be available on the checkout page of e-commerce sites along with other traditional payment options.
For retailers, Tabby presents an opportunity to grow revenues and transaction sizes due to the convenient payment options they would provide their customers and unprecedented access to the region’s unbanked or underbanked.
“Tabby customers will be able to better manage their spending by making purchases at their convenience and paying for them when they have the funds available while retailers will benefit from being able to sell more to their customers, and gain access to a larger customer base,” said Arab.
“Wamda is excited to be partnering with one of the region’s most successful entrepreneurs. This is a continuation of our thesis to back great founders building products addressing clear and demonstrable market pain points,” said Fadi Ghandour, executive chairman of Wamda.
This is the first round of funding for the startup, which will use the capital to further develop its proprietary technology, grow its merchant network and hire talent across multiple geographies.
“We are partnering with some of the largest retailers in the UAE at launch, and will be adding new retail partners regularly,” said Arab.