MENA-based payments and shopping app Tabby has raised USD 58 million in funding at USD 660 million valuation, with PayPal also participating in the investment. The funding will be used to expand Tabby’s product line into a plethora of consumer financial services and support the company’s growing operations that now include Egypt.

The fintech has raised more than USD 410 million in equity and debt since its 2019 launch. Rising interest in BNPL for Egyptians Until September 2022, Tabby, which allows users to shop with flexible payments online and in-store from global brands, including H&M, Adidas, IKEA, noon, and Bloomingdale’s, was active in Saudi Arabia, UAE, and Kuwait. Now, the company called Egypt an attractive market with underbanked consumers looking for ways to spend online outside what is available to them easily, which is cash.

Officials from Tabby said that the Egyptian consumer right now is quite used to buying in instalments, which usually come with added costs in the form of interest or additional fees. So, coming in with an entirely cost-free product for the customer has been quite a differentiator, and they’ve seen a lot of strong demand there. The officials noted that the Egyptian market and the economy as a whole is in a fairly difficult spot at the moment with a constant devaluation of their currency.

And so, there are clear challenges to this market, at least in short to medium term, outside of just pure consumer demands. Tabby’s confidence in deploying BNPL in MENA Consumer demands differ across regions and noting the nuances behind each market is adequate for survival as a fintech. In developed countries where credit is traditionally accessed via credit cards, BNPL can be seen as a nice-to-have, mainly due to its instalment aspect.

However, for developing markets where credit penetration is low or having a credit history is asking for too much, BNPL has a more robust use case. It’s why Tabby’s board members believe their startup is somewhat insulated by the troubles affecting Affirm, Afterpay, and Klarna, global private and public BNPL players that have become worryingly loss-making and thus, taken hits to their valuation. Tabby’s representatives added that there have been pullbacks from a demand perspective.

And just as important is the pending credit crunch coming to some of these more developed markets bringing higher credit risk, which might end up hitting the bottom line of these companies. Now, the economy’s structure is different for some of the markets the company is in at the moment. Credit penetration in the MENA region is significantly lower than in other developed markets.

From a credit risk perspective, consumers are not overstretched as they don’t have two or three credit cards. So from a demand perspective, there’s a real gap and opportunity that they are filling. The relevance that Tabby’s officials speak of can be seen in the company’s new numbers.

In March 2022, for instance, the Buy Now, Pay Later upstart had a little over 1 million active users who shopped with more than 3,000 brands yearly. Now, Tabby says more than 3 million users shop from 10,000+ brands, including nine out of MENA’s 10 largest retail groups. The fintech company has also issued more than 150,000 Tabby Cards only six months after launching its cards program, with in-store sales now making up over 10% of the company’s volumes.

The company stated that its revenues have increased 5x in 2022. .