Tabby raises $58M, at $660M valuation. PayPal Ventures invests in the GCC for the first time

MENA-based, buy now, pay it later startup Tabby Sequoia Capital India led the financing, while STV provided the valuation at $660 million. The investors co-led the fintech’s Series B extension Last June, it was around.

PayPal Ventures, PayPal’s global corporate venture arm, is one of the participating shareholders. This marks PayPal’s first investment in the Gulf Cooperation Council, but its second in the MENA area. after Egyptian fintech Paymob). Other investors in Tabby’s new financing round include Mubadala Investment Capital, Arbor Ventures and Endeavor Catalyst.

According to a statement shared by the Dubai-based company, the funding will be used to expand Tabby’s product line into a plethora of consumer financial services and support the company’s growing operations that now include Egypt. Since its 2019 launch, the fintech has raised more that $410 million in equity or debt.

Until last September, Tabby, which allows users to shop with flexible payments online and in-store from global brands, including H&M, Adidas, IKEA, noon and Bloomingdale’s, was active in Saudi Arabia, UAE and Kuwait. Co-founder, CEO Hosam ArabIn a TechCrunch interview last JuneEgypt is a market that is attractive to consumers who are not able to access cash and want to shop online.

“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,” Arab said, providing an update on how the expansion has fared. “Having said that, the Egyptian market and the economy as a whole is in a fairly difficult spot at the moment with a constant devaluation of their currency. And so, there are clear challenges to this market, at least in short to medium term, outside of just pure consumer demands.”

The consumer needs of different regions are different. Understanding the differences between markets is essential for fintech survival. BNPL can be considered a nice-to have in developed countries. Its installment aspect is primarily because credit is traditionally accessed using credit cards. BNPL is a better option for those in developing countries where credit penetration is low, or where credit history is too complicated. It’s why Arab believes his startup is somewhat insulated by the troubles affecting Affirm, Afterpay and Klarna, global private and public BNPL players that have become worryingly loss-making and thus, taken hits to their valuation.

“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,” said the CEO, making a case for Tabby’s growth in a cooling BNPL space.

“Now, the economy’s structure is different for some of the markets we [Tabby] They are available today. The MENA region’s credit penetration is much lower than that of other developed countries. From a credit risk perspective, consumers are not overstretched as they don’t have two or three credit cards. So from a demand perspective, there’s a real gap and opportunity that we are filling.”

Tabby has remained positive despite the global recession and low demand for growth businesses. double its valuation from 18 months agoDespite raising less capital in a subsequent round, it remains one of the most valuable startups in the MENA. Arab said that commAnding this present valuation conveys Tabby’s product relevance and ability to build a sustainable business in a reasonably challenging space, including upstarts such as Saudi-based Tamara and Egypt’s Sympl and Khazna.

The relevance Arab speaks of can be seen in Tabby’s new numbers. Tabby’s new numbers show that the buy-now, pay-later upstart had just over 1,000,000 active users last March. These users shopped with over 3,000 brands annually. Tabby estimates that Tabby has over 3 million users shopping with more than 10,000 brands, nine of the 10 largest retail chains in MENA.

The fintech company has also issued more than 150,000 Tabby Cards only six months after launching its cards program, with in-store sales now making up over 10% of the company’s volumes. The company claimed that revenues have increased 5x in the last year.

GC Ravishankar, the managing director at Sequoia Capital India, speaking on the investment, said Tabby has the opportunity “to offer several innovative products to its consumers and improve access while creating more affordability.” About this, CEO Arab explained that Tabby recently launched a product for everyday purchases, such as groceries and food, and will allow customers that don’t have access to credit cards to make purchases and pay at the end of the month.

“There are clear gaps in the market when we look at offering consumers better financial services and products. An area that we see great opportunity in is allowing our customers to use us for their day-to-day purchases,” noted the chief executive. “We believe this a great opportunity to provide deeper engagement with our customers as they start to transact more frequently with us.”

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