Dubai-based fintech Tabby that offers a buy now pay later solution to businesses in the United Arab Emirates has raised $7 million in a new round to fund its growth and launch its product in Saudi, it announced in a statement to MENAbytes today. The investment was led by Saudi’s Raed Ventures with the participation of China’s MSA Capital and existing investor Arbor Ventures. The startup had raised $2 million in a seed round just seven months ago in a round led by Berlin-based Global Founders Capital.
Tabby was founded in 2019 by Hosam Arab who previously co-founded, led, and exited the region’s leading fashion ecommerce platform Namshi. It helps retailers in the United Arab Emirates and now Saudi to boost their sales by offering their customers flexible payment options; including a single deferred payment or multiple installments.
Its Pay Later option is an alternative to cash on delivery (COD) that allows customers to buy products online by using their mobile phone number and email address and make the payment 14 days after making the purchase. The customers don’t have to share their credit card details at the time of purchase. This option addresses some of the biggest concerns of the customers who use COD for online purchases.
The Pay in Installment options gives customers the flexibility to pay in installments of 2, 3, or 6 months. The payments by the customers are made by using debit or credit cards, with additional payment options including cash kiosks expected to be added soon.
Tabby doesn’t charge the customers with a fee or interest for both the options and makes money by charging the merchants. The payment options can easily be integrated by participating merchants on their checkout page along with other usual payment options such as credit cards and COD.
The Dubai-based fintech is able to provide these payment options to customers by instantly assessing customer risk at the merchant’s checkout page by analyzing a number of data points on the customer. It then decides if it is comfortable to allow them to check out, its CEO had revealed in a conversation with MENAbytes last week, adding that it only needs customer’s phone number and email address to feed our risk engine and produce a decision.
As Tabby points out in its statement, ecommerce in GCC is rapidly growing as a result of Covid-19 as consumers shift their purchase behavior to do more of their shopping online but the region is also very likely to see a negative financial impact on businesses and consumers in the months to come. Tabby says that its solution provides a timely and much needed financial product to help customers better manage their spending by splitting their purchases into multiple, zero-interest installments while shopping at their favorite retail stores,
“This innovative payment solution will empower consumer spending, increase customer loyalty, and open up retailers to new customers across the region,” it noted in a statement.
Hosam Arab, co-founder and CEO of Tabby, said, “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 capitalized to support their sales.”
Saed Nashef, the Founding Partner of Raed Raed Ventures, said, “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.”
The Dubai-based startup with the investment also announced the signing of an agreement with Apparel Group, one of the largest retail groups that will offer Tabby’s solution on its fashion ecommerce platform 6thStreet and the rest of its online portfolio including Tommy Hilfiger and Aldo’s online shopping portals in Saudi.
Tabby has partnered with over 20 regional ecommerce retailers including Abdul Samad Al Qurashi and Golden Scent. It has recently also announced a partnership with DHL that will enable online businesses using DHL’s services to provide their customers with the flexible payment options offered by Tabby.
Spotii, another Dubai-based fintech that is going after the buy now pay later space has also recently launched its platform. Rise is also a player that is experimenting with a cross-border buy now pay later service for migrant workers in the UAE.
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