UAE-founded Buy Now Pay Later (BNPL) provider tabby  has raised Series A financing round of $23 million in debt and equity led by Arbor Ventures and Mubadala Capital, with participation from STV, Raed Ventures, Global Founders Capital, JIMCO, Global Ventures, Venture Souq, Outliers VC, MSA Capital, HOF and AB Accelerator. This funding will fuel the company’s next stage of growth, helping tabby scale its product and engineering capabilities in addition to its lending capacity, further benefiting its merchant partners and consumers.

Founded in 2019, tabby partners with retailers to offer their customers online or in-store the ability to defer paying for their purchases for up to 30 days or to pay in four equal monthly installments at zero cost to the consumer. Today, tabby’s customers are able to use its service across more than 500 integrated merchants across the UAE and Saudi Arabia, including global brands like IKEA, Toys R Us and Ace Hardware and regional retail giants including Al Futtaim Group, Landmark Group and Apparel Group.

"BNPL solutions are booming globally thanks to accelerated payments digitisation and e-commerce penetration, and the Middle East is no exception. tabby’s solution fits squarely within our thesis that fintech solutions will drive better experiences for merchants and consumers. We are excited to partner with Hosam and his team as they build tabby into a regional fintech leader,” said Ibrahim Ajami, Head of Ventures at Mubadala.

tabby has managed to successfully capitalise on three key Covid-driven trends that have helped fuel its growth: the dwindling availability of consumer credit, the adoption of contactless payments by consumers, and the rapid retail shift online. According to a report by Kearney Middle East, the average share of GCC households that have bought goods online has reached over 8 per cent in 2020. Given the range in developed markets sits at 16 to 25 per cent, there is significant room for growth. This digital shift is also seen offline, with mobile payments for point of sale transactions in Saudi Arabia having grown 495 per cent for the past year until September, according to Saudi Payments.

“The shift to online retail has never been more evident, and with it, consumers are becoming ever more demanding as they actively seek convenience and reliability in their shopping experience. And this includes how they pay for their purchases. We’re very proud of the value we’ve been able to bring our retail partners by providing their customers with an exceptionally convenient and flexible way to pay,” said Hosam Arab, co-founder and CEO of tabby.

The company says integration of its payment service can increase conversion rates by over 20 per cent and boost transaction sizes anywhere from 30 to 85 per cent, by providing consumers with access to zero-cost, real-time credit. Moreover, tabby says it has also helped online retailers convert a growing share of their customers from paying in cash to paying digitally due to the value proposition of interest-free installments.

This round of financing comes after tabby announced a partnership with Visa and joined the Saudi Arabian Central Bank’s regulatory sandbox.

Wamda has invested in tabby