tabby visa card

The Dubai-based buy-now-pay-later startup Tabby just raised $58 million during a Series C funding round led by Sequoia Capital and that counted with the participation of other prominent VC firms in the fintech space including PayPal Ventures and Mubadala Investment Capital.

The resulting valuation for Tabby was $660 million. To date, the firm has raised $410 million in both equity and debt since it was officially launched in 2019. This marks an important step in the evolution of the fintech industry in the Gulf Cooperation Council (GCC) as it is the second time that PayPal Ventures makes an investment in the region.

Tabby will use these funds to keep expanding to new markets and strengthen its position in countries including Egypt in which it is seen some explosive growth.

“With rising interest rates and growing inflation, it has never been more important for people to have access to payment flexibility to stay in control of their finances”, commented the Chief Executive Officer of Tabby, Hosam Arab.

He added: “Despite downward pressure on fintech valuations, our business continues to sustainably scale as we lead the generational shift towards fair and transparent financial products in MENA.”

What is Tabby?

Tabby offers financing for shoppers in the MENA region. The company has secured partnerships with over 10,000 brands and currently serves over 3 million active users who benefit from its solution.

The firm’s flagship product is “Split in 4”. This solution allows shoppers to buy any product they would like and only pay a quarter of its value. The remaining three-quarters of the price will be split into three monthly payments that are free of interest.

In addition, the firm launched the Tabby Card, a financing product that lets users split their online or physical (PoS) purchases in the same way. The card charges no fees or interest for the purchases either and the credit limit is set individually depending on the borrowers’ creditworthiness.

Tabby works with some of the world’s most popular retailers including Adidas, H&M, IKEA, Golden Scent, and SHEIN. In addition, its card is supported by Google and Apple Pay.

According to its most recent figures, Tabby’s revenues grew by 5 times in 2022 compared to the previous year. Over 150,000 Tabby cards have been issued to date and 9 out of the 10 largest retail groups in the MENA region offer the firm’s services both online and physically within their stores via QR codes.

What Does the Future Hold for Tabby?

The immediate goal for Tabby is to strengthen its presence in other countries within the region starting with Egypt where the company is identifying positive tailwinds for the services it offers.

“The Egyptian consumer right now is quite used to buying in installments, which usually come with added costs in the form of interest or additional fees. So, coming in with an entirely cost-free product for the customer has been quite a differentiator, and we’ve seen a lot of strong demand there”, CEO Arab told TechCrunch.

Also read: How to Invest in Stocks in the UAE? Beginner’s Guide

That said, the company is facing similar challenges to other fintech and traditional finance players as the prospect of a global recession, rising inflation, and higher interest rates are hurting the demand for loans.

“I would say there have been pullbacks from a demand perspective. And just as important is the pending credit crunch coming to some of these more developed markets bringing higher credit risk, which might end up hitting the bottom line of these companies”, Arab commented referring to the state and prospects of BNPL businesses in the near term.

However, Tabby believes that the market’s structure and situation in the MENA region are different from that of the Western world as consumers are less indebted and that creates a “real opportunity” for the company to expand its services to reach a largely unattended audience.

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