Islamic fintech start-up Tamara is yet another Saudi start-up which has captured the interest of global investors evident by its latest funding round.
The buy-now-pay-later (BNPL) company has secured an additional US$250 million in debt financing, bringing its total warehouse financing facility to up to US$400 million. This is on the heels of another Saudi Islamic BNPL company, Tabby, closing a US$200 million Series D round, making it the Islamic fintech industry’s first unicorn.
The latest line of credit consists of an incremental up to US$200 million of senior debt arranged by Goldman Sachs, in addition a further up to US$50 million mezzanine tranche led by Shorooq Partners.
“These funds will catapult us forward, enabling us to further develop our flagship BNPL product and invest in new, innovative products and services, which will strengthen our position as a leader in the industry,” said Stefan Marciniak, CFO of Tamara.
Founded in 2020 by Abdulmajeed Alsukhan, Turki Zarah and Abdulmohsen Al Babtain, Tamara has since built a user base of over 9 million and a merchant network of at least 26,000. Backed by Public Investment Fund-owned Sanabil Investments, the Riyadh-based company has expanded into the UAE, Egypt, Germany and Vietnam.
Tamara, which counts Checkout.com, Coatue, and Endeavor Catalyst as its investors, has been on a phenomenal upward trend. In its first year of operations, it closed the largest seed funding round in Saudi Arabia at US$6 million in 2021, followed by a US$110 million Series A Funding in 2022, which was the largest in MENA at that time.
Tamara’s successful funding rounds underscores the profile Saudi start-ups are receiving. Saudi Arabia is one of the largest Islamic fintech markets in the world by number of start-ups. As at the 20th November 2022, it has at least 41 fintech start-ups offering Shariah compliant services, according to the IFN Islamic Fintech Landscape.
“We want to support the local Saudi fintech ecosystem, and we are pleased to be strengthening our partnership with Tamara,” shared Nathan Kwon, a principal at Shorooq Partners. “The region is poised for remarkable progress, and we are excited to be part of it.”
The global BNPL market is projected to reach US$20.4 billion by 2028, registering a cumulative annual growth rate (CAGR) of 22.4% from 2021-28, according to Grand View Research. In Saudi Arabia, BNPL payments are expected to rise by 50.1% to US$284.7 million this year with a CAGR of 16.4% over the same period.