Mubadala-backed Tabby hits unicorn status ahead of planned Saudi IPO

New $200m series D funding round gives it a value of more than $1.5bn

Tabby is active in Saudi Arabia, the UAE and Kuwait. Photo: Tabby

Mubadala-backed buy now, pay later platform Tabby has achieved unicorn status after it raised $200 million in a series D funding round, joining a highly elite group of billion-dollar start-ups from the Middle East and North Africa.

With a valuation of more than $1.5 billion, Tabby joins the UAE's Careem, Kitopi, Swvl and Emerging Markets Property Group, Saudi Arabia's STC Pay and Egypt's Fawry on the exclusive list.

The investment will help Tabby, which was founded in Dubai, expand its operations in Saudi Arabia and the UAE, the Arab world's two biggest economies, as it prepares for a planned initial public offering in the kingdom, the company said on Wednesday.

Tabby announced its relocation to Saudi Arabia in September as part of its preparations for a listing on the Tadawul stock market. It did not provide further details on its IPO plans.

US-based Wellington Management led the latest funding round, with Hong Kong's Blue Pool Capital and existing investors such as Abu Dhabi's Mubadala Investment Capital, Saudi Arabia's STV, PayPal Ventures and Arbor Ventures also taking part.

Tabby manages more than $6 billion in annualised transaction volume, and the new funding will be used to continue developing the company's financial and shopping services for consumers and retailers, it said.

“With this investment, we can advance our mission across Saudi Arabia and the UAE,” said Hosam Arab, chief executive and co-founder of Tabby.

The BNPL business model, which allows consumers to make online purchases instantly and spread their payments out over interest-free instalments, has boomed since the onset of the Covid-19 pandemic, driven by the millennial and Generation Z cohorts.

The global BNPL market is projected to hit $565.8 billion in 2026, from an estimated $309.2 billion in 2023, growing at a compound annual rate of 25.5 per cent, the latest insight from GlobalData shows.

The number of unicorns in Mena is expected to grow by 2030, with more than 45 start-ups expected to emerge from the region by the end of the decade, led by Saudi Arabia, a previous report from STV had shown.

The UAE unveiled its updated Entrepreneurial Nation 2.0 initiative that has a goal of creating 20 unicorns by 2031.

Tabby has been actively attracting more funding to boost its operations. In January, it raised $58 million in a series C round that valued it at $660 million.

That made the company one of the most valuable start-ups in Mena and the first in the GCC to receive funding from the venture capital arm of PayPal.

The company secured $150 million in debt financing from US-based Atalaya Capital Management and Partners for Growth in August 2022, in one of the largest credit lines secured by a FinTech start-up in the GCC.

In March of the same year, it raised $54 million from Sequoia Capital India and STV in March.

Tabby has become “a reference model in terms of both discipline and disruption – two things that are hard to crack in tandem”, said Abdulrahman Tarabzouni, founder and chief executive of STV.

The BNPL platform is active in Saudi Arabia, the UAE and Kuwait, with more than 80 per cent of its 10 million-strong user base coming from the kingdom, according to the company.

In addition to Tabby, there are a number of players such as Postpay, Cashew, Spotii and Tamara that are also jostling for a share of the Middle East's BNPL market.