Tabby, a UAE-based Buy-Now, Pay-Later and Cash on Delivery alternative raises $2M in seed funding
Tabby, a UAE-based FinTech startup, announced that it has raised $2M in seed funding to offer, via its banking partners, instant credit to consumers shopping at online and offline retailers. Tabby’s seed round was led by Global Founders Capital, with participation from Arbor Ventures and Wamda Capital among other investors.
Founded by Hosam Arab, previously co-founder and CEO of online retail site Namshi, Tabby provides consumers across the UAE and Saudi Arabia with the flexibility to pay for their online and offline purchases either in a deferred single payment or in multiple installments. Tabby’s proprietary decision engine allows customers to check out without the need to enter their credit or debit card details when making a purchase and thus Tabby intends to become a serious alternative to cash-on-delivery (COD).
The Middle East and North Africa (MENA) region is the fastest-growing region for e-commerce globally. A 2019 study by Visa reported that the UAE boasted strong online transaction figures averaging at $144 per purchase, but that COD remains the preferred option for the majority of online shoppers. For merchants, COD comes with a hefty price tag and often translates into a higher risk of packages being returned.
“We're excited to be launching a Buy-Now, Pay-Later business that provides great value to consumers, retailers and financial institutions while addressing the government's goals of growing non-cash transactions in their economies,” said Hosam Arab, CEO of Tabby.
Tabby is currently integrating its technology with a number of large retail merchants in the region and will be available on the check-out page of e-commerce sites as a method of payment along with other traditional payment options such as credit cards and COD.
For retailers, Tabby presents an opportunity to grow revenues and transaction sizes due to the convenient payment options they would provide their customers and unprecedented access to the region’s unbanked or underbanked.
“Tabby customers will be able to better manage their spending by making purchases at their convenience and paying for them when they have the funds available, while retailers will benefit from being able to sell more to their customers, and gain access to a larger customer base,” said Arab.
Melissa Guzy, Managing Partner at Arbor Ventures said “Tabby represents our first investment in the Gulf region where we have seen tremendous growth in the e-commerce space. Hosam’s proven execution abilities, knowledge of the retail e-commerce and Arbor’s understanding of the Buy-Now, Pay-Later business, having been an early investor in Paidy and Akulaku, two of Asia’s largest businesses in a similar space, gives us great confidence in Tabby’s future”.
This is Tabby’s first round of funding and will be used to further develop its proprietary technology, grow its merchant network and hire talent across multiple geographies.