Saudi Arabia's FinTech start-up Tamara raises $100m to fund expansion plans

The buy now, pay later platform is also planning an initial public offering, chief executive says

The Saudi FinTech Tamara, which has to date raised $216m in equity and debt, expects to become profitable next year. Photo: Tamara

Saudi Arabia's buy now, pay later platform Tamara raised $100 million in its second funding round to back its expansion plans and is also considering an initial public offering in the future, its chief executive has said.

Tamara's Series B funding round was led by Sanabil Investments, which is backed by the kingdom's sovereign wealth fund, the Public Investment Fund, the start-up said in a statement on Monday.

Other investors included Coatue, Shorooq Partners, Endeavor Catalyst and a follow-on investment by London-based payments processor Checkout.com.

The FinTech will use the proceeds to offer new products and expand into "adjacent" markets, with a focus on the Middle East and North Africa region, Abdulmajeed Alsukhan, chief executive of Tamara, told The National.

Tamara is also considering a listing in Saudi Arabia in the future, with the possibility of a second listing in other markets, he said.

Mr Alsukhan added that the company, which has to date raised $216m in equity and debt, expects to become profitable next year.

The BNPL model allows customers to divide the cost of their online shopping into interest-free instalments or pay off the entire amount after a certain period of time.

The payment model boomed during the Covid-19 pandemic, with many customers opting for delayed payments due to financial uncertainty. Merchants also benefited from improved conversion rates of traffic coming to their platforms.

Research by Checkout.com showed that more than 50 per cent of customers across the region will use BNPL services in 2022. The survey concluded that – in addition to those already using BNPL – 31 per cent of UAE residents plan to use the technology in the coming 12 months, followed by Saudi Arabia at 27 per cent, Kuwait at 26 per cent and Bahrain at 18 per cent.

Founded in September 2020 by Mr Alsukhan, Turki Bin Zarah and Abdulmohsen Albabtain, Tamara was the first BNPL platform to enroll in the Saudi Central Bank’s Sandbox programme.

The start-up has more than three million customers and has partnerships with more than 4,000 merchants including Ikea, Adidas, online retailers Shein and Namshi, Saudi Arabian retailer Jarir and local small businesses, its website said.

“Tamara’s exceptional growth while maintaining healthy unit economics speaks volumes about what the team has achieved so far," Sanabil Investments said in the statement.

The start-up has the potential to "transform huge industries such as financial services and shopping in the region and beyond", it said.