BNPL startup Tamara now valued at $1bn after raising $340m

Saudi fintech firm Tamara said on Monday that it has raised $340m in a Series C equity funding round, valuing the buy-now, pay-later platform (BNPL) at $1bn.

The funding round was co-led by SNB Capital and Public Investment Fund’s Sanabil Investments. It had the participation of Shorooq Partners, Pinnacle Capital and Impulse joining existing investors such as Coatue, Endeavor Catalyst and Checkout.com.

Tamara said the latest equity funding round was the largest investment in a GCC fintech company after the BNPL platform secured additional debt financing from Goldman Sachs and Shorooq Partners to upscale its warehouse facility to up to $400m.

With this transaction, Tamara will have raised a total of $500m in equity funding, and well above $400m in debt financing since its inception in late 2020.

“As we set our sights on becoming the next big giant in shopping, payments and banking we remain ever grateful for the significant opportunity in this underpenetrated and underserved banking and financial services landscape,” Abdulmajeed Alsukhan, co-founder, and CEO of Tamara said, adding that the BNPL platform’s achievement is a testament to the ecosystem, investors, and the collaborative spirit that makes the GCC region a great place for talent to flourish.

Founded by three Saudi co-founders, Alsukhan, Turki Bin Zarah and Abdulmohsen Al Babtain, the BNPL counts SHEIN, IKEA, Jarir, Noon, eXtra and Farfetch among its regional and global partners.

Tamara operates in the UAE, Saudi Arabia and Kuwait. The BNPL platform has more than 10 million users and works with more than 30,000 merchants.

Saudi Arabia’s buoyant BNPL space

Meanwhile, Tamara was one of the first fintech firms to receive a licence to provide BNPL services from the Saudi Central Bank (SAMA).

Last week, SAMA issued legislation to regulate the licencing of the BNPL platform as part of the central bank’s broader strategies to develop the financial services sector while empowering the country’s growing fintech ecosystem.

The legislation sets out minimum standards and procedures required to offer BNPL services.

Tabby, another Saudi-based fintech company, hit a $1.5bn valuation in pre-IPO fundraising, the company said last month.

BNPL is growing rapidly in Saudi Arabia, with the number of customers registered rising from 76,000 in 2020, to three million in 2021 to 10 million in 2022, according to SAMA.

However, many startups in the Middle East faced a tougher fundraising environment in 2023 as a global slowdown in venture deals that began in 2022 spread to the region.

MAGNiTT, a Dubai-based startup data provider, said the MENA region’s fintech venture capital landscape saw deals and deployed capital retreat by more than 40 per cent year-on-year, which captures data on startups and fundraisings. The decline left a gap of 80 deals and $622m to 2022 levels as of Q3 2023.

Read: The Middle East’s booming venture capital market