Saudi Arabia’s FinTech startup Tamara raises $100 million to fund expansion plans
Saudi Arabia’s buy-now, pay-later platform Tamara raised $100 million in its second round of funding to support its expansion plans and is also looking at an IPO in the “future”, according to its CEO.
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 startup said in a statement on Monday.
Other investors include Coatue, Shorooq Partners, Endeavor Catalyst and a follow-on investment from London-based payment processor Checkout.com.
FinTech will use the proceeds to offer new products and expand into “adjacent” markets, focusing on the Middle East and North Africa region, Abdulmajeed Alsukhan, CEO of Tamara, told The national.
Tamara is also looking at a listing in Saudi Arabia in the future, with the possibility of another listing in other markets, he said.
The company, which has raised $216 million in equity and debt to date, expects to become profitable next year, Alsukhan said.
The BNPL model allows customers to split the costs of online shopping in interest-free installments or pay off the entire amount after a certain period of time.
The payment model flourished during the Covid-19 pandemic, with many customers opting for delayed payments in the wake of economic uncertainty. Merchants also benefited from improved conversion rates for traffic coming to their platforms.
According to research by Checkout.com, more than 50 percent of customers across the region will use BNPL services by 2022. The research concluded that – in addition to those who already use BNPL – 31 percent of UAE residents plan to use the technology in the coming 12 months followed by Saudi Arabia with 27 percent, Kuwait with 26 percent and Bahrain with 18 percent.
Founded in September 2020 by Saudi entrepreneurs Mr Alsukhan, Turki Bin Zarah and Abdulmohsen Albabtain, Tamara was the first BNPL platform to join the Saudi Central Bank’s Sandbox programme.
The startup has more than three million customers and has partnered with over 4,000 merchants, including Ikea, Adidas, online stores Shein and Namshi, Saudi Arabian retailer Jarir and local small businesses, according to its website.
“Tamara’s exceptional growth while maintaining healthy unit financials speaks volumes for what the team has achieved so far,” Sanabil Investments said in the statement.
The startup has the potential to “transform huge industries such as financial services and shopping in the region and beyond,” it said.
Updated: 22 August 2022, 15:54
