Buy-now-pay-later (BNPL) platform Tabby has secured a Fatwa certifying the Shariah compliance of its solution in Saudi Arabia.
The Shariah integrity of Tabby’s interest-free instalment mechanism was independently approved by Bahrain-based Shariyah Review Bureau, which will also conduct a yearly Shariah audit to ensure ongoing compliance with Islamic principles.
Founded in 2019, the Dubai-headquartered firm has expanded into Saudi Arabia since and grown its merchant base to over 3,000 brands and small businesses.
“With a strong presence in the UAE and Saudi Arabia, we are continuing to expand our services to the rest of the GCC countries,” shared Abdulaziz Saja, Tabby’s general manager in Saudi Arabia.
The Shariah approval comes after a US$50 million equity round in July, which Tabby said valued the start-up at US$300 million. That round was on the heels of a US$50 million debt financing raised a month prior. These brought its total funding to over US$130 million in less than two years.
The latest Series B financing, which was led by Global Founders Capital and STV with participation from Delivery Hero, CCVA and existing investors, is being channeled toward expanding Tabby’s product portfolio and expansion into new markets. Existing investors include Arbor Ventures, Mubadala Investment Capital, Raed Ventures, Global Ventures, MSA Capital, VentureSouq, Outliers VC, Jameel Investment Management Company and HOF.
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 the UAE specifically, BNPL is expected to grow by 52.6% on an annual basis to reach US$509.5 million, according to figures from ResearchAndMarkets. A 17.9% CAGR is forecasted for the market during 2021-28. In Saudi on the other hand, 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.
The phenomenal growth, fueled by a boom in e-commerce, has attracted a number of Islamic fintech providers including Split in Malaysia and Saudi’s Sahala.