The Saudi Arabian fintech company Tamara has risen to unicorn status, making it the Kingdom’s first-ever start-up company valued at $1 Billion.
Tamara’s buy now pay later offerings are Shariah compliant, with the company serving over 10 million users across the GCC. The company plans to expand into shopping payments and banking services.
What is a Fintech Unicorn?
In the world of start-ups, companies that reach a valuation of $1 billion are referred to as ‘unicorns.’ This term alludes to their rarity and exceptional success. With this recent funding round, Tamara has joined this exclusive club, becoming the first fintech unicorn in Saudi Arabia.
The Journey to Unicorn Status
Tamara, buy now pay later, was established in late 2020 by co-founders Abdulmajeed Alsukhan, Turki bin Zarah, and Abdulmohsen Al Babtain. The company was born to provide innovative solutions for the fintech industry in Saudi Arabia and the Gulf Cooperation Council (GCC) countries.
Since its inception, Tamara has seen impressive growth, expanding its services across Saudi Arabia, the United Arab Emirates (UAE), and Kuwait. Today, the company serves over 10 million users and collaborates with more than 30,000 partner merchants.
Series C Funding Round
The recent series C equity funding round was jointly led by SNB Capital, Saudi Arabia’s largest bank unit, and Sanabil Investments, an entity owned by Saudi Arabia’s Public Investment Fund.
Other participants in the funding round included notable entities such as Shorooq Partners, Pinnacle Capital, and Impulse, who joined existing investors Coatue, Endeavor Catalyst, and Checkout.com.
The $340 million raised in this round pushed Tamara’s valuation beyond $1 billion, earning it the coveted unicorn status.
The funds raised in the series C round will be used to develop new products and services. Tamara aims to extend its reach beyond the Buy Now, Pay Later (BNPL) market and tap into opportunities in shopping, payments, and banking services across the GCC region.
The company’s CEO, Abdulmajeed Alsukhan, expressed his vision for Tamara to become “the next big giant in shopping, payments, and banking.” He also stressed the significant opportunities available in a financial services market that is “underpenetrated and underserved.”
Tamara stands out due to its observance of the Sharia law, not charging any interest on payments. Its financial solutions are designed strictly with Islamic Sharia principles, with no delayed payments.
The Shariyah Review Bureau(SRB) has granted a Shari’a Certificate after confirming that Tamara’s products meet the AAOIFI Shari’a Standards. SRB is a preeminent Shari’a Advisor in the corporate world, with its presence in 21 countries from the US, Europe, Africa, GCC, and Asia.
The BNPL Market in Saudi Arabia
The Buy Now Pay Later market has been experiencing rapid growth in Saudi Arabia. The number of customers using BNPL services has skyrocketed from 76,000 in 2020 to over 10 million in 2022.
Digital payment volumes in the region are also projected to grow by 20% annually until 2025, reaching 13 billion transactions with a total value of $170 billion.
Tamara is considering going public because of the company’s successful growth and recent unicorn status. The potential listing, which would occur in Saudi Arabia, may be followed by a second listing in other markets.
The Growth of Fintech in the Middle East
Tamara’s unicorn status is a significant milestone for the Middle East’s fintech industry. The UAE, Saudi Arabia, and Egypt are the region’s largest markets for venture capital, having collectively attracted more than $7.88 billion in investments from 2018 to 2022.
Despite a 43% drop in capital investments across the five most-funded venture markets in the Middle East and North Africa (MENA) region in the first nine months of the year, Saudi Arabia still managed to attract $536 million in investments.
Tamara is not the only unicorn in the region. Other companies such as UAE’s Careem, Kitopi, Swvl, Saudi Arabia’s STC Pay, and Egypt’s Fawry have also achieved unicorn status. Mubadala-backed BNPL platform Tabby joined the unicorn list after raising $200 million in a series D funding round.
The Future of Tamara
With its recent funding success and the rapid growth of the fintech market in Saudi Arabia, Tamara’s future appears promising. The company is well-positioned to capitalize on the opportunities in the BNPL market and beyond.
As Tamara continues to innovate and expand, it serves as a beacon of success in the Middle Eastern fintech industry, paving the way for future unicorns in the region.
Fostering the Kingdom
Tamara’s journey to unicorn status is a testament to the fintech industry’s potential in the Middle East. As more companies like Tamara continue to innovate and grow, the future of fintech in the region looks bright.
The success of Tamara also highlights the importance of venture capital in fostering innovation and driving economic growth in the region.