The startup will use the investment to develop its buy-now, pay-later software, acquire more global talent and expand its merchant network.
UAE-based fin-tech startup Tabby raises $2 million in seed funding to offer instant credit to consumers shopping at online and offline retailers. The startup leverages its banking partners to provide an alternative solution to cash-on-delivery options for e-commerce purposes. The seed round was led by Global Founders Capital with participation from Arbor Ventures and Wamda Capital, and more. This is Tabby’s first round of funding, which the startup plans to use to develop their proprietary technology, expand its merchant network and hire talent in the region and beyond.
“We’re excited to be launching a Buy-Now, Pay-Later business that provides great value to consumers, retailers and financial institutions while addressing the government’s goals of growing non-cash transactions in their economies,” says Hosam Arab, CEO of Tabby.
Established by Hosam Arab, previously known as the founder and CEO of online retail site Namshi, the startup enables consumers across Saudi Arabia and UAE with the flexibility to pay for purchases either in a deferred single payment or in multiple installments. Tabby’s proprietary software allows customers to check out without needing to enter credit/debit card information when making a purchase.
“Tabby represents our first investment in the Gulf region where we have seen tremendous growth in the e-commerce space. Hosam’s proven execution abilities, knowledge of the retail e-commerce and Arbor’s understanding of the Buy-Now, Pay-Later business gives us great confidence in Tabby’s future,” says Melissa Guzy, Managing Partner at Arbor Ventures.
A 2019 study by Visa reveals that the UAE boasts a strong online transaction figure that is around $144 per purchase, yet cash-on-demand remains the preferred option for the majority of online shoppers, and the same can be said for most MENA-based countries. The MENA region has one of the fastest-growing e-commerce landscapes and the alternative solution provided by Tabby can unlock more potential for the industry.
For merchants, cash-on-delivery comes at a high price and often transforms into a higher risk of items being returned. For retailers, Tabby provides an opportunity for revenue growth due to the convenient payment options they would provide to their unbanked or underbanked customers.
“Tabby customers will be able to better manage their spending by making purchases at their convenience and paying for them when they have the funds available, while retailers will benefit from being able to sell more to their customers, and gain access to a larger customer base,” says Arab.
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