Gulf buy now, pay later (BNPL) firm Tabby said on Wednesday it secured $150 million in debt financing from US-based firms Atalaya Capital Management and Partners for Growth.
It is the largest credit facility ever secured by a fintech in the Gulf region, Tabby said in an emailed statement.
The company has raised $275 million in total capital so far including a Series B extension earlier this year, it said.
Founded in 2019, Dubai-based Tabby partners with retailers to offer consumers, both online and in-store, the option to defer paying for purchases for up to 30 days or to pay four equal monthly instalments at zero cost.
“The Middle East and North African market dynamics make BNPL highly more relevant compared to developed markets where players continue to face challenges,” Tabby said.
The BNPL business model emerged out of a very low interest rate environment which enabled BNPL firms to raise funds at relatively low cost and offer point-of-sale loans to customers on online shopping websites.
Consumers pay for their purchases in instalments over a period of weeks or months, usually interest-free, and BNPL firms charge online retailers a fee for each transaction.
But the sector faces a reckoning as the circumstances which fuelled its explosive growth are coming to an end, with consumers cutting spending and rising interest rates pushing up BNPL firms’ funding costs, squeezing their margins.