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PayPal Ventures backs Klarna-rival Tabby with $58M at $660M valuation, becomes most valuable BNPL in MENA

Image credits: Tabby

Tabby, a Dubai-based shopping and financial services app, has raised $58M in a Series C funding round at a massive valuation of $660M. Investors who participated in the round include Sequoia Capital India, STV, PayPal Ventures, Mubadala Investment Capital, Arbor Ventures, and Endeavor Catalyst. 

The latest round makes Tabby one of the most valuable startups in MENA and the first in the GCC to receive funding from PayPal Ventures. The announcement comes at a time, where its BNPL rival Klarna has laid off 10% of its workforce to restructure the company amid economic uncertainty.

Meanwhile, the Dubai firm will use the funds to scale its product line and support its growing operations. 

Hosam Arab, CEO and Co-Founder of Tabby says, “With rising interest rates and growing inflation, it has never been more important for people to have access to payment flexibility to stay in control of their finances. Despite downward pressure on fintech valuations, our business continues to sustainably scale as we lead the generational shift towards fair and transparent financial products in MENA.”

The announcement comes five months after raising $150M in debt financing from Atalaya Capital Management. The company also raised $54M in Series B funding last year in March. 

He adds, “We’re excited to grow with an incredible set of investors who believe in the opportunity to create a healthier relationship with money for consumers in a region that’s ripe for change.”

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. 

Last year, Tabby also crossed 3M active shoppers and grew 5x in revenue over the previous year.

Saudi Arabia, the United Arab Emirates, Egypt, and Kuwait are among the countries Tabby is active in.

GV Ravishankar, MD, Sequoia India, says, “We are excited to see Tabby grow into a leading consumer-focused fintech company for the region. Over the next few years, it has the opportunity to offer several innovative products to its consumers to improve access while creating more affordability. The team has done this with a continued focus on good credit quality and strong economics.”

Ihsan Jawad, Partner at STV, says, “We are pleased to be doubling down on our partnership with Hosam, Daniil, and the team on their growth journey across the region. Backing Tabby means tapping into MENA’s $95bn BNPL market opportunity that is just getting started and being part of the future of financial services across the region.”

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