Source: Entrepreneur
Gulf BNPL (Buy Now Pay Later) startup Tamara announced on June 29, 2022 that it is set to expand its operations into the UAE. Customers in the UAE are thrilled at the prospect of splitting payments with zero interest at leading retailers. So far, Tamara has onboarded big brands like Shein, Namshi, Styli, Fitness Time, Swarovski, Adidas, IKEA, L’Occitane, Yves Saint Laurent, and Faces. Tamara CEO and co-founder Abdulmajeed Alsukhan believes that the global expansion will help sign on hundreds of more merchants on the BNPL platform in the coming months. Adding that Dubai is a natural second home for Tamara, Alsukhan thinks the current growth rates and strong market potential are conducive for Tamara’s meteoric growth.
According to a Dubai CommerCity research on the digital commerce environment in MEASA, the UAE is the second-fastest growing eCommerce market in the Gulf Cooperation Council (GCC) after Saudi Arabia. Both the UAE and Saudi Arabia will see annual eCommerce growth rates greater than the GCC region’s predicted growth rate of 33% from 2019 to 2022, at 38% and 39%, respectively. No wonder Tamara’s founders have doubled down on its growth plans to capture the MENA market.
Tamara was established in Saudi Arabia in September of 2020 by serial entrepreneur Abdulmajeed and his business partners Turki Bin Zarah and Abdulmohsen Albabtain. It quickly gained popularity in the local startup scene. Tamara was the first BNPL company to be accepted into the Saudi Central Bank’s sandbox programme; it closed the largest seed funding round at the beginning of 2021 at US$6 million; and later that year, it concluded a US$110 million Series A funding. The Series A funding was led by Checkout.com, and was the largest ever funding recorded in MENA.
Soon after, Sanabil Investments, a fully owned subsidiary of the Kingdom’s wealth fund PIF, led the $100 million Series B investment that Tamara raised. Coatue, Shorooq Partners, Endeavor Catalyst, and a follow-up investment from leading global financial Checkout.com also participated. The Series B round took the total funding to $216 million in equity and debt.
Tamara, which has more than 3 million consumers and more than 4,000 merchant partners, will utilize the financing to extend its product offering across new shopping verticals as well as enter new countries. Tamara’s co-founder and CEO, Abdulmajeed Alsukhan, stated: “Our mission is to deliver an exceptional experience to our customers by offering transparent, seamless and inclusive payment solutions. We act as a marketing and discovery channel for our partner merchants to drive new customers and incremental sales online and in-store.”
The future has a lot in store for Tamara, Alsukhan beams. “It’s a very exciting time for Tamara. In the coming months we will be launching some major brands, and rolling out new products that enhance the shopping and payments experience. On the customer’s side, we see a clear need for more financial inclusion.” He further elaborates: “Credit card penetration is relatively very low, and existing financial offerings lack transparency and fairness. Our seamless and completely digital journey is a game changer.”
According to Reuters, Tamara is also negotiating debt financing deals with local, regional, and worldwide lenders. This is a new venture for local banks that are still getting to know the fledgling industry.
According to Alsukhan, the firm provides its network of merchants with real top- and bottom-line advantages, increasing conversion rates and lowering returns. One of the biggest obstacles for e-commerce platforms in the MENA area is cash-on-delivery payment methods, which the startup’s solutions have also been able to lower for merchants. While seeing consumers of various ages, Alsukhan says that millennials and Gen Z continue to make up the majority of the startup’s end-user population. Although it varies depending on the category, there are also more women than males. He says, “We find that the biggest motivation is flexibility. Another factor that drives adoption is trust- customers can approach Tamara across multiple channels, and we are fair and transparent.”
It’s intriguing to observe the team’s strategy for ensuring that its solutions stay unique when new players enter the BNPL market. Alsukhan reminds us that as a B2B and B2C company, they prioritize innovation by tackling problems that affect both their merchant partners and end users as customers. Alsukhan confirms, “Our success is driven by a constant drive to speak with our customers, benchmark ourselves to the best globally and set very high standards for quality. Tamara has top quality international talent, and we challenge ourselves to raise the bar every day. This philosophy permeates across the company, and it is the main reason why we have achieved so much in such little time.
