Tabby’s $150M financing highlights how Middle Eastern BNPL resists market turmoil

The raise: UAE-based BNPL provider Tabby secured $150 million in debt financing, which it said was the biggest credit facility ever secured by a Gulf fintech, per a press release.

• The funds would be used to grow transaction volumes and expand its product offering, Tabby explained.
• As one of the largest BNPL firms in the Gulf region, it’s raised $275 million to date.

Tabby shrugs downturn: Fears of a global economic slowdown have blunted BNPL heavyweights like Afterpay and Klarna in recent months. But Tabby says that the limited access to credit for consumers in the region makes it less vulnerable to the tumult affecting competitors in the US and Europe.

In Saudi Arabia, the region’s largest economy, less than 20% of the population has a credit card, compared with more than 70% in the US, per Tabby. It claimed that this helps make its BNPL products more relevant to consumers. In the first half of this year, its revenues have grown 10-fold, and it tripled its active retailer partners through tie-ins with H&M, Nike, and Swarovski.

What now? BNPL companies that can establish themselves in the Middle East stand to gain from a growing market.

• While it only accounts for about 1% of total ecommerce spending, BNPL is expected to pick up steam in the region. The strongest growth is projected in Saudi Arabia, where BNPL is forecast to represent 3.4% of ecommerce spend by 2025, per FIS.
• And shoppers in the UAE rank among the highest globally in terms of one-off BNPL purchases, per YouGov.

Foreign players could explore building a presence in the region, which seems less sensitive to the BNPL market turmoil than Europe and the US.