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London Tech Week

Klarna rival Tabby secures $700M debt financing from J.P. Morgan, expands Series D to $250M

Tabby founders
Picture credits: Tabby

The BNPL industry in the UAE remains strong and this type of payment adoption is expected to grow steadily and reach 12.3% during 2023-2028. Despite this predicted growth, the Klarna rival from the region, Tabby has secured up to $700 million in receivables securitisation from J.P. Morgan. This marks the largest asset-backed facility obtained by a fintech company in the MENA region.

In a parallel move, Tabby extended its Series D financing to close $250 million with participation from Hassana Investment Company. The round was joined by US-based Soros Capital Management and KSA-based Saudi Venture Capital (SVC).

Late last year, Tabby raised $200 million in equity financing as a part of its Series D funding at a $1.5 billion valuation. This follows the $150 million in debt financing it received last year and the $58 million Series C funding round raised earlier this year.

The new financing is set to strengthen Tabby’s balance sheet significantly, especially amidst the growing demand for its services. This capital influx will facilitate further expansion of Tabby’s financial services and shopping products, benefiting its vast consumer base of 10 million and a network of 30,000 retailers.

The company intends to use the new funding to amplify its reach and impact in the MENA region. The focus will be on expanding the market penetration, innovating further in their sector, and continuing to offer exceptional value to consumers and merchants while upholding transparency, affordability, and responsible lending practices.

Klarna’s rival from Gulf

Founded by Daniil Barkalov and Hosam Arab in 2019, Tabby is a buy now, pay later company that allows consumers to shop and pay in 4 installments at no cost. Last year, the company announced the launch of Tabby Card, a first-of-its-kind solution in MENA, tapping into 90% of the offline retail opportunity.

To date, the fintech firm has issued over 150,000 Tabby Cards, with in-store sales making up over 10% of the company’s volumes. Currently, over 10,000 global brands and small businesses, including H&M, Adidas, IKEA, SHEIN, noon, and Bloomingdale’s, use Tabby’s technology to gain loyal customers by offering flexible payments online and in stores. 

Hosam Arab, CEO and Co-Founder of Tabby said: “Securitisation is a major milestone, not only for Tabby but also the first of its kind for the region. It mirrors the rapid growth and evolution of the fintech landscape in our markets. We’re incredibly proud of our collaboration with J.P. Morgan, Hassana, Soros, and SVC. Their teams’ confidence in our vision and capabilities underscores Tabby’s pivotal role in reshaping personal finance and shopping in MENA.”

George Deves, Co-Head of Northern European ABS at J.P. Morgan, said: “We are pleased to be collaborating with Tabby on this new transaction. A vibrant and growing consumer lending sector is vital for the local economy. We are pleased to work with Tabby on this strategic initiative to support retail credit throughout the Middle East.”

Ahmed Al Qahtani, Chief Investment Officer for Regional Markets at Hassana Investment Company, said: “The recent Series D funding round, coupled with the $700 million asset-backed securitisation will support Tabby in amplifying its reach and impact. As a committed and long-term investor, we believe in Tabby’s vision to empower consumers and merchants alike and reshape the future of financial services in Saudi Arabia and the wider MENA region. Tabby is poised for accelerated growth, further market penetration, and continued innovation. The company remains focused on delivering exceptional value to both consumers and merchants while maintaining its commitment to transparency, affordability, and responsible lending practices.”

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