- Tabby says IPO ‘next logical step’
- It has 12m customers
- BNPL growing 45% a year globally
Tabby, the buy-now-pay-later startup backed by Abu Dhabi sovereign wealth fund Mubadala, is on track to prepare for its initial public offering, the company’s CEO confirmed on Wednesday.
The fintech unicorn – a startup worth more than $1 billion – was originally founded in the UAE but is now headquartered in Saudi Arabia. It is expected to list on the Saudi Tadawul stock exchange, although no date for the offering has been confirmed.
Tabby achieved unicorn status last year, reaching a valuation of over $1.5 billion after securing $200 million in a Series D funding round.
The round was led by US-based Wellington Management, with participation from Hong Kong’s Blue Pool Capital, Abu Dhabi’s Mubadala Investment Capital, Saudi Arabia’s STV and Arbor Ventures.
Tabby also became the first startup in the Gulf to receive backing from PayPal Ventures.
“We’re very happy to report strong growth since Tabby’s inception, which has consistently attracted investor interest,” Hosam Arab, Tabby’s co-founder and CEO, said in a statement to AGBI.
“With significant growth potential in retail and consumer finance, an IPO is the logical next step for Tabby.”
The company has 12 million customers and 40,000 sellers on its platform. It describes itself as the Middle East and North Africa’s “leading shopping and financial services app,” indicating plans to evolve into a full-service financial app.
Tabby this week announced its agreement to acquire Saudi digital wallet provider Tweeq. Arab said the two companies will “unlock a whole new suite of financial products”.
Tweeq, founded in 2020 and licensed by the Saudi Central Bank (Sama), allows customers to spend, send and manage money using its digital wallet app.
Although Tweeq will continue to operate independently, Tabby plans to explore expanding its financial product suite to include digital spending accounts, cards and money management tools in compliance with local regulations.
The demand for BNPL services, which allow consumers to purchase products and spread their payments over interest-free installments, has surged in recent years, driven by the growth of online shopping.
- Buy now, pay later growing fast in UAE and Saudi Arabia
- $200m fund for Gulf startups launched by Saudi investors
- Gulf’s ‘copycats’ still attractive to Silicon Valley
Tabby faces competition from several players, including Postpay, Cashew, Spotii and Tamara. Its user base spans Saudi Arabia, the UAE and Kuwait, with more than 80 percent of its users in the kingdom.
BNPL payments in Saudi Arabia are expected to grow by around 13 percent annually, from $1.4 billion in 2023 to $2.7 billion by 2028, according to consumer analysis firm Research and Markets.
While the UAE market is dominated by young expatriates, Saudi Arabia has a higher prevalence of young nationals, often within larger households. Fashion and electronics are the most popular purchase categories in both markets.
The global BNPL market size is expected to grow rapidly in the next few years. It will grow to $1 trillion in 2028 at a compound annual growth rate of 45 percent, Research and Markets said in a report. Swedish BNPL company Klarna is also reportedly preparing for an IPO next year.
In 2022, both the UAE and Saudi Arabia implemented standards to regulate the BNPL sector.