Riyadh-headquartered buy now pay later (BNPL) platform Tamara has raised USD 110 million in its Series A funding round led by leading global payment processor Checkout.com, the company announced. The round is comprised of debt and equity and comes just four months after the Saudi fintech raised USD 6 million in the country’s largest seed round.
According to data, its latest deal is the largest-ever investment raised by a fintech firm in the Middle East and North Africa. It is also the region’s largest Series A round and the largest-ever investment raised by a Saudi startup (at any stage—assuming Stc Pay is not a startup). For context, there are only half a dozen startups that have had USD 100 million funding rounds in the region.
Tamara did not disclose the breakdown, so it is difficult to speculate on the valuation. Given the nature of its business, it’s likely that a large part of the deal came in as debt. MENAbytes understands that Checkout.com has acquired a minority stake in Tamara as a result of the deal. The London-headquartered company, which was valued at USD 15 billion in its most recent financing earlier this year, has previously made acquisitions and investments, but Tamara is its first bet in the Middle East.
Checkout.com has a sizeable business in the Middle East with companies like Careem, Deliveroo, Property Finder, and many others using its payment services. As a link between various merchants and their customers for payments, it has important insights on digital payments and consumer behavior in the region. Its investment in Tamara can be taken as a huge vote of confidence in the young Saudi startup, as well as the regional fintech ecosystem.
Launched in September 2020, Tamara enables online and offline merchants in Saudi Arabia and the United Arab Emirates to offer BNPL services to its customers. The platform allows customers to defer their payment for 30 days or pay in three equal installments over the course of two months. The options are available on the checkout pages (for online merchants) and through in-store QR codes (for brick-and-mortar stores). The repayments can be made using Tamara’s mobile app, which supports different payment methods, including Mada, Visa, Mastercard, and Apple Pay.
According to its website, Tamara’s services are shariah-compliant as customers don’t have to pay any interest or fees. The money comes in from merchants who have to pay a fee for using its services. They’re willing to pay the fee as it helps them increase their sales; while also serving as an alternative to cash on delivery (COD).
The startup founded by Abdulmajeed Alsukhan, Turki Bin Zarah, and Abdulmohsen Albabtain claims to be the market leader in the BNPL space in Saudi Arabia. In a statement, it said that its transaction volume has grown about 170% on average month-over-month, during the last six months. It currently has over 1,000 merchants, including Namshi, Floward, SACO, Whites, Nerjee, and Nice One. With the latest funds, Tamara plans to fuel its expansion and launch in new GCC markets by the end of the year. Starting next year, it is also eyeing expansion beyond the Gulf region.
“Tamara was born to make a change. The region and the world need payment solutions that are transparent and customer-oriented. At Tamara, we offer our customers an alternative to credit cards and COD, which enhances their shopping experience. Our solution also increases our merchant partners’ efficiency as well as their customer satisfaction,” stated Tamara’s co-founder and CEO Abdulmajeed Alsukhan in a statement.
“This new investment is only the beginning of our journey and a great sign that we are on the right track. We are proud to have the trust of such an investor, and we will continue expanding our products to transform the payments industry in the region,” added Alsukhan, who previously co-founded leading Saudi grocery marketplace, Nana.
Sebastian Reis, executive vice president of Checkout.com, said, “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 its vision and expand rapidly, driving greater conversions for retailers and offering more flexibility for consumers.”