After closing the largest seed round in Saudi Arabia earlier this year, buy-now-pay-later (BNPL) platform Tamara is flexing its financial muscles again, with a US$110 million Series A funding, the largest in MENA.
Led by Checkout.com, the fresh round of investment will be used to expedite Tamara’s regional expansion. The Saudi start-up intends to be present in the rest of the GCC by the end of the year, before expanding into the wider region.
Launched in September 2020 by serial entrepreneur Abdulmajeed Alsukhan and his partners Turki Bin Zarah and Abdulmohsen Albabtain, Tamara was the first BNPL firm to be enrolled in the Saudi Central Bank’s sandbox program. Five months into its first year of operations, the start-up closed US$6 million in seed funding, the largest in the Kingdom for 2021.
Since then, the firm has been in high-growth mode. It grew its clientele to include over 1,000 merchants including brands such as SACO, Whites, Nejree and Nice One. It expanded into the UAE with partners like Namshi and Floward. Tamara also rolled out its mobile consumer app along with its in-store service with multiple local partners. Its user base has been surging 180% month-on-month while transaction volume has been growing at about 170% month-on-month over the last six months.
The US$110 million cash injection – which is a combination of debt and equity investment – will go toward growing its team, setting up in new GCC countries, and to fund the distribution of its BNPL product.
“As the partner of choice for the region’s leading e-commerce merchants, Checkout.com is always on the lookout for ways to enhance the ecosystem. Tamara has rapidly proven itself to be a natural leader in the BNPL space. Our investment in Tamara will help the team realize their vision and expand rapidly, driving greater conversions for retailers and offer more flexibility for consumers,” commented Sebastian Reis, the executive vice-president at Checkout.com.
Checkout.com’s investment is in the backdrop of a fast-growing e-commerce landscape – Visa estimates it would be worth US$49 billion by 2022. Tamara’s Shariah compliant cash-on-delivery alternative could drive sales revenue for the e-commerce site.
The BNPL market is growing exponentially and has attracted a number of Islamic fintech providers. The market is projected to grow 400% to about US$680 billion in transaction volume globally by 2025, according to Tamara.