Saudi Arabia-based startup Tamara has secured $6m of seed capital on the back of increased activity in the buy now pay later sector.
Impact46, a certified B Corporation describing itself as being dedicated to social impact, led the raise, according to Wamda.
Vision Ventures, Wealth Well, Seedra, Khwarizmi, Hala and Nama along with multiple family offices also backed the round.
“We enable merchants to grow their sales and entice their customers with our buy now pay later and instalment services that do not include any fees the customer has to pay,” said Abdulmajeed Alsukhan, CEO and co-founder of Tamara.
“We strongly believe Tamara will be a game-changer for both merchants and customers. It will positively re-shape the purchasing power in the market.”
Tamra will use the money to accelerate its growth plans as well as expand across Saudi Arabia and the UAE.
“The FinTech market is expected to reach $33bn in transaction value by 2023,” said Abdulaziz Alomran, CEO of Impact46. “We believe that buy now pay later is an untapped area in this huge market, and we are proud to support the Saudi pioneers leading Tamara who will surely play a major role in the transformation and future of financial services in KSA & GCC.”
Tamara’s raise comes on the back of increased activity in the BNPL space.
For instance, at the beginning of January Affirm began trading on the Nasdaq, with its shares jumping by more than 100% in the first day.
Affirm had raised a $500m Series G round in September, which was one of the ten biggest capital investments recorded in the FinTech industry last year.
Affirm going public is not the only sign the BNPL segment of the industry is growing.
A Bank of America survey predicted in December that apps such as Affirm, Afterpay, Klarna and PayPal were poised to grow between ten and 15 times by 2025 “to eventually process between $650bn and $1trn in transactions.”
Other noteworthy deals include Klarna securing a $10.65bn valuation on the back of closing a $650m round in September 2020, making it Europe’s most valuable privately owned FinTech company at the time before Checkout.com claimed the title after closing a $450m Series C funding round at a $15bn valuation earlier this month.
Companies outside of the BNPL space have also decided to enter the industry. PayPal has recently launched an instalments solution in the US and in the UK, Curve has teamed up with Thought Machine to power its instalments startup Curve Credit and in Denmark challenger bank Lunar announced plans to also enter the space in October on the back of a €40m cash injection.
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