Fintech Tabby doubles debt facility

Tabby

• Buy now, pay later firm Tabby has secured $350m funding
• BNPL predicted to be worth almost $4 trn by 2030
• Tabby has 4 million active users

Buy now, pay later company Tabby has doubled its existing debt facility as it looks to maintain triple-digit growth recorded in recent years.

The fintech is backed by Abu Dhabi sovereign fund Mubadala and secured $350 million in funding through key global credit investors.

Buy now, pay later (BNPL) allows consumers to order and take a product without immediately paying for it. Demand for the service has risen in recent years, driven by an increase in online shopping.

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The global BNPL market size was valued at $90.69 billion in 2020. Allied Market Research predicts it will reach $3.98 trillion by 2030, growing at a compound annual growth rate of 45.7 percent.

Tabby has more than four million active users and works with over 15,000 global brands and small businesses, including H&M, Adidas, Ikea, Shein, Noon and Bloomingdales.

The company is active in Saudi Arabia, the UAE and Kuwait.

Hosam Arab, CEO and co-founder, told AGBI: “We’re still looking at triple-digit growth year-on-year, which is what we’ve managed over the last few years and I think that continues to be the case as the opportunities arise for us.”

The expanded debt facility will support Tabby’s core BNPL business and allow it to serve more customers, retailers and purchases, a company statement indicated.

Arab said the ongoing cost of living crisis was leading more and more consumers to turn to the alternative payment model.

“As the cost of living grows in our region, there’s definitely increased pressure on consumers to make their dirhams and riyals work,” he said.

“Therefore if you come to them with a solution that is basically free to the consumer from a credit perspective, it becomes a bit of a no-brainer to use it and to move your spend towards it.”

He dismissed concerns that the instalment financing encouraged people to borrow more than they can afford, saying they withdraw customer access if they are not able to pay.

He added: “We’re able to put a cap on what a customer can spend, as opposed to traditional credit where as long as you’re paying your absolute minimum you can continue to overburden yourself with more and more expensive credit.”

The funding was led by San Francisco-based Partners for Growth and New York-headquartered Atalaya Capital Management and CoVenture, a multi-strategy asset management firm from Miami.

Atalaya managing director Justin Burns said: “Tabby’s ability to deliver robust topline growth while simultaneously improving economics is a rare accomplishment.”

Tabby raised $58 million in Series C funding in January, from backers including Sequoia Capital India, STV, PayPal Ventures, Mubadala Investment Capital, Arbor Ventures and Endeavor Catalyst, which valued the company at $660 million.