UAE-based Tabby, a buy now, pay later financial technology (fintech) startup, has raised $7 million to fund its growth and launch its offering in Saudi Arabia. The funding round was led by Raed Ventures with participation from MSA Capital and existing investor Arbor Ventures.
Launched in 2019 by Hosam Arab, previously co-founder and chief executive officer (CEO) of online retail site Namshi, with an initial $2 million in seed funding in which Wamda participated, Tabby gives consumers the flexibility consumers to buy products and pay for them at a later time.
The startup says its Pay Later option is an alternative to cash on delivery (COD) by allowing customers to purchase products online using only their mobile phone number and email address and requires no pre-registration or credit card to use. Tabby’s Pay in Installments option gives customers the flexibility to pay for their purchases in multiple, interest-free installments without requiring a credit card.
“We are very pleased to bring our best-in-market solution to Saudi Arabia at a time when consumers and merchants alike will be strapped for cash. This funding will give our merchant partners further security and assurance that we are sufficiently capitalised to support their sales,” said Arab.
Over the past few months Tabby has partnered with more than 20 regional e-commerce retailers including Golden Scent and most recently the Apparel Group, whose portfolio includes Tommy Hilfiger and Aldo. Tabby also signed an agreement with logistics firm DHL to handle its COD payments.
“Hosam and his team have built an impressive product that structurally solves key friction points in a transaction for both consumers and merchants, which is especially relevant given the current pandemic. We’re very excited to partner with Tabby, and support its timely launch in Saudi Arabia,” said Saed Nashef, founding partner at Raed Ventures.
The Coronavirus pandemic and subsequent lockdown has boosted e-commerce in the GCC. Coupled with the likely negative financial impact on businesses and consumers in the months to come, Tabby claims to offer a financial product that can help customers better manage their spending by splitting their purchases into multiple installments which can increase customer loyalty and open retailers up to new customers in the region.