Buy now, pay later in Saudi Arabia Tamara’s chief executive has stated that the company is thinking about an initial public offering in the future and that it has raised $100 million in its second funding round to support its expansion objectives.
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 start-up said in a statement on Monday.
Other investors included Coatue, Shorooq Partners, Endeavor Catalyst and follow-on investment by London-based payments processor Checkout.com.
FinTech will use the proceeds to offer new products and expand into “adjacent” markets, with a focus on the Middle East and North Africa region, Abdulmajeed Alsukhan, chief executive of Tamara.
Tamara is also considering a listing in Saudi Arabia in the future, with the possibility of the second listing in other markets, he said.
Mr. Alsukhan added that the company, which has to date raised $216m in equity and debt, expects to become profitable next year.
The BNPL model allows customers to divide the cost of their online shopping into interest-free instalments or pay off the entire amount after a certain period of time.
The payment model boomed during the Covid-19 pandemic, with many customers opting for delayed payments due to financial uncertainty. Merchants also benefited from improved conversion rates of traffic coming to their platforms.
Research by Checkout.com showed that more than 50 percent of customers across the region will use BNPL services in 2022. The survey concluded that – in addition to those already using BNPL – 31 percent of UAE residents plan to use the technology in the coming 12 months, followed by Saudi Arabia at 27 percent, Kuwait at 26 percent, and Bahrain at 18 percent.
Founded in September 2020 by Mr. Alsukhan, Turki Bin Zarah, and Abdulmohsen Albabtain, Tamara was the first BNPL platform to enroll in the Saudi Central Bank’s Sandbox program.
The start-up has more than three million customers and has partnerships with more than 4,000 merchants including Ikea, Adidas, online retailers Shein and Namshi, Saudi Arabian retailer Jarir and local small businesses, its website said.
“Tamara’s exceptional growth while maintaining healthy unit economics speaks volumes about what the team has achieved so far,” Sanabil Investments said in the statement.
According to the start-up, “vast businesses like financial services and retail in the region and beyond” have the potential to be transformed.
