Tamara, a Saudi-Arabia-based “buy now, pay later” platform, raised $110 million in a Series A funding round led by London-based payments processor Checkout.com.
The investment, which is a mix of debt and equity, will be used to hire new staff and help the start-up accelerate its expansion across the GCC by the end of this year followed by its entry into other geographies, the company said in a statement on Thursday.
Tamara, which is currently operating in the kingdom and the UAE, was “born to make a change”, Abdulmajeed Alsukhan, the company’s co-founder and chief executive, said.
“We offer our customers an alternative to credit cards and cash-on-delivery, which enhances their shopping experience … increases our merchant partners’ efficiency as well as their customer satisfaction,” Alsukhan said.
“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.”
BNPL allows customers to divide the cost of their online shopping into interest-free instalments or pay off the entire amount after a certain period of time.
The payment model boomed during the Covid-19 pandemic, with many customers opting for delayed payments in the wake of financial uncertainty. Merchants also benefited through improved conversion rates of traffic coming to their platforms.
The Europe, Middle East and Africa region leads the global market in terms of BNPL adoption, according to Worldpay’s 2020 Global Payments report. It is expected to reach 8.9 per cent of total e-commerce purchases in the region by 2023, up from 5.8 per cent last year.
Founded last year, Tamara was the first BNPL company to join the Saudi Central Bank’s Sandbox programme. It closed a round of $6m in seed funding in January this year, making it one of the largest seed rounds in the kingdom, the company said.
“Tamara has rapidly proven itself to be a natural leader in the buy now pay later space. Our investment in Tamara will help the team realise their vision and expand rapidly, driving greater conversions for retailers and offer more flexibility for consumers,” Sebastian Reis, executive vice president at Checkout.com, said.
In less than one year of operations, Tamara’s user base has grown to more than 1,000 merchants including Namshi, Floward, Saco, Nice One, Whites and Nejree.
The company’s user base has increased almost 180 per cent on a monthly basis and transaction volumes have surged 170 per cent on average over the past six months.
Currently, it is offering two payment options to customers – “pay in 30 days” and “pay in three instalments”, both of which are available online and in-store through the company’s consumer app.