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Over the last six months, several firms have experienced a decrease in their valuation due to a decline in venture capital investment amid an increase in interest rates. Fintech businesses operating in the public and private marketplaces, including Affirm, Afterpay, and Klarna, have had difficulties, particularly those specializing in purchase-now, pay-later services for Western consumers. However, Tabby, a platform that provides Middle Eastern clients with BNPL services, is now doing quite well.

After moving its headquarters from Dubai to Riyadh, Tabby completed a $200 million Series D investment round, valuing the company at $1.5 billion. This highlights the app’s significant growth and market significance in how consumers purchase and pay, positioning it as the first fintech startup unicorn in the Gulf.

This comes less than a year after Sequoia Capital India and STV, two investors in the most recent unicorn round, led Tabby’s $58 million Series C investment. Former backers, including PayPal Ventures, Arbor Ventures, and Mubadala Investment Capital, joined. The lead investor, Wellington Management, one of the best independent investment management companies in the world, and growth equity investor Bluepool Capital are among the new backers at the same time.

“Over the past year, we’ve experienced quite phenomenal growth. As a result, we witnessed a surge of interest from investors who, in my opinion, had always recognized the potential of the BNPL concept. About the company’s development and investor interest, founder and CEO Hosam Arab told TechCrunch, “Despite seeing the challenges with the model in other markets, there was that interest in understanding why this market is different and why we’ve grown profitably.”

Many investors had already seen this strategy in other markets, so we looked into having various conversations with interested parties. We felt that this was the right time to seek funds. We believe this may be the final round of funding we raise before an IPO. We also included investors with experience in the public market.

Three essential components are highlighted in Arab’s remark. First off, Tabby reached profitability, setting a challenge for its counterparts worldwide. The company has raised over $950 million in debt and stock. Although Tabby’s profitability was not made public, Arab claimed that the startup’s sales had increased threefold. He explains Tabby’s success by saying that it operates in a market whose structure makes sense economically for a BNPL model.

Over 30,000 brands—including Adidas, Amazon, H&M, and Shein—as well as ten of the biggest retail chains in the MENA area collaborate with Tabby to offer BNPL services to over 10 million customers in Saudi Arabia, the United Arab Emirates, and Kuwait at the point of sale and in-store. Even though Tabby launched a few years after services like Afterpay and Affirm, it still has a sizable client base—far lower than Klarna’s enormous 150 million customers—nearly equal to Afterpay’s 16 million and Affirm’s 14 million active users.

However, Tabby asserts that BNPL providers are lucrative in the GCC, unlike in the US and Europe, where they frequently run at a loss. There are several explanations for why this may occur. Consumers’ access to credit options is limited despite the region’s comparatively low e-commerce adoption, especially in Saudi Arabia and the UAE (8% and 15%, respectively). Consequently, BNPL functions as a vital credit source. In contrast, in developed markets with a plethora of credit alternatives, it is considered a convenience for many customers in the Middle East and, consequently, the Gulf, where it is indispensable.

Tabby appeals to two different markets. The first results from the low credit card penetration in nations like Saudi Arabia, where only 15% of people have credit cards (the GCC has about 10%, while the UAE has over 40%). Customers who find Tabby’s tokenized payment system convenient make up the second group. Tabby is frequently the initial and only source of credit for both portions. Because consumers enjoy having access to credit, the startup’s distinct market position has resulted in solid payment performance, easing worries about impulsive spending and unmanageable debt brought on by BNPL services.

“Purchasing something now and paying for it later is ineffective in marketplaces where consumers have excessive credit use. It puts more of a strain on these customers. Buy now, pay later. Suppliers still need to look into affordability, and those markets’ laws are still in the early stages of development,” Arab continued. Nonetheless, they are the two elements that are helpful in our marketplaces. First off, customers aren’t overworked or overwhelmed.

Before Tabby enters a market, consideration is given to the extent of e-commerce penetration, the degree of credit card penetration (low to moderate), and the spending power of the customer. This explains why it left Egypt, a market it had entered six months earlier, in February. Egypt’s e-commerce market and penetration are smaller than those of Tabby’s more well-known markets despite the country’s low credit penetration rate of 4%. Additionally, the country’s credit system is less effective than that of Saudi Arabia and the United Arab Emirates, and its customers have lower purchasing power. Notwithstanding its withdrawal, Tabby may return to the Egyptian market, according to Arab, if the firm “begins to see promising signs of e-commerce opportunity.”

Saudi Arabia remains Tabby’s biggest market, accounting for 80% of its clientele and most of its $6 billion annual transaction volume. These statistics and the company’s IPO preparations on the Saudi stock exchange inspired the fintech’s decision to expand its presence in its largest market and relocate its headquarters from Dubai to Riyadh. The precise date of this listing on the Tadawul is still unknown, though.

Almost 4,000 businesses now accept the payment option in its second-largest region, where it introduced Tabby Cards last year to let users in the UAE make in-store purchases. This accounts for almost 20% of the platform’s overall volumes, up from 10% in January. The business also introduced Tabby Shop, which allows customers to find and follow the most incredible offers and items in one location by displaying over 500,000 products from thousands of companies.

According to Arab, the firm intends to make more significant investments in its present markets by providing clients with extra goods that improve their financial security. This involves broadening the scope of Tabby’s product offerings to cover a wider variety of financial services, such as payments and savings, and adding other credit choices that increase Tabby’s reach outside of its network.

Abdulrahman Tarabzouni, the founder and CEO of STV, who has invested in Tabby since its Series A round, stated, “Tabby created a new industry and is transforming the way people consume and pay across MENA.” “Hosam and his team created a renowned company that serves as an example of disruption and discipline—two traits that are difficult to combine. We are thrilled to witness Tabby evolve into a crucial component of Saudi Arabia’s financial scene, fostering expansion and enhancing the national economy.

The COVID-19 pandemic highlighted how important it is to research, produce, and disseminate new medicines continually. Vaccines against the coronavirus often require extremely stringent temperature controls to be active. Because of this, transporting the vaccines to the locations at which they were required to be in a temperature-safe state became nearly as crucial as actually producing the vaccines themselves.

Today, SkyCell, one of the businesses that created containers to carry these medications along with many other non-shelf stable drugs used to treat a range of ailments, is announcing a significant amount of investment to drive its expansion. SkyCell is also one of the firms that designed containers to transport unshelf-stable pharmaceuticals that are used to treat several conditions. The Swiss start-up company has raised 57 million Swiss francs in a fresh round of equity funding, resulting in a new valuation of 600 million.

The financing comes at the same time as SkyCell is, so to speak, reaching new heights: it is now shipping $1.5 billion of pharmaceutical products each month (finished and raw ingredients). According to what is stated, this translates to hundreds of millions of doses of diagnostic solutions, cancer therapies, diabetic care, and preventative measures. Ironically, even though the company played a part in assisting with the distribution of vaccinations, the height of the pandemic years was not the greatest for SkyCell’s expansion. Because everything else in terms of medical treatment came to a complete and total standstill and supply chains slowed down dramatically, so did SkyCell’s business as well.

In a recent interview, the company’s co-founder and current CEO, Richard Ettl, stated that the business has now reverted to its “normal” growth rate, which is between 40 and 50 percent.

Catalyst, which is a branch of M&G Investments, is the sole investor that is being identified at this time and is heading the round. In the past, the firm has successfully funded over $133 million, with earlier games totaling $62 million and $35 million; previous backers have included insurance companies, bankers from the Middle East, and investors specializing in the healthcare industry.

Because of the critical nature of their delivery at the appropriate moment, time-sensitive pharmaceuticals and the components that pharmaceutical companies use to manufacture completed treatments typically travel via air freight. This is because of the complexity of the logistics involved in transporting them. However, the ambient temperatures during the process of being carried—which includes getting packed onto an airplane, flying, landing, and passing through customs—can fluctuate by as much as 100 degrees (more specifically, from as low as -30 degrees Celsius to as high as +70 degrees Celsius).

SkyCell has, in essence, developed a business model that is vertically integrated to overcome this obstacle. At its core is a piece of hardware that takes the form of a “smart” box that is constructed around the intellectual property (IP) that SkyCell has developed on its own (the company presently holds about 140 patents). The most recent revision of the device has a maximum operating time of 180 hours.

According to Ettl, “That provides you with an incredible amount of protection if things go wrong, which they do all the time.” Other methods for delivering temperature-sensitive items have remained astonishingly outdated and inefficient. Approximately 70% of businesses today still use products like Styrofoam and cold packs, which are both regarded as disposable. According to SkyCell, the waste produced due to the current method is enormous and is believed to be over $35 billion a year in terms of items that go bad.

It is an educational lesson for other businesses aiming for similar sorts of disruption, and it speaks to the reality of the long process that corporations go through when they change systems.

According to Ettl, the pharmaceutical business is an excellent illustration of a large and well-established sector that requires time before it can embrace and trust change. “You need the pharmaceutical company to buy into a new player, but they can’t rely on someone who might go out of business within the next year. ” They called after them and shouted, “Come back; I don’t want to be your guinea pig.” The process of getting beyond that obstacle has been challenging. It is necessary to provide evidence for all of this. Now that we are ten, it took us six or seven years to start. He joked that although it had been in business for ten years, it was still the “youngest company in the industry.”

This gives the company a recurring revenue stream on top of the boxes, which allows it to manage the business better. Along with the container, the company has also built an analytics platform for its customers to monitor and manage their supplies as they move from lab to lab and distribution centers. Considering that the boxes are typically purchased outright, this gives the company an advantage in managing the business.

In terms of future product development, a firm like SkyCell has a lot of options at its disposal. To begin, there are several other items, namely food, that also require specific temperature controls. Instead of broadening its operations, the corporation has decided to maintain its concentration on the pharmaceutical industry and to continue pursuing growth in that sector.

Its main goal is to be sustainable and switch to a CO2-neutral supply chain. This helps it meet its own emissions and sustainability goals as well as the goals of its major clients in the medicine and aviation industries.

“It is with great excitement that we join SkyCell in its quest to provide access to life-saving medications worldwide securely and dependably.

According to Praveg Patil, deputy head of EMEA investments for M&G’s Catalyst team, “We believe the innovative design of the SkyCell solution will play a key role in decarbonizing the pharmaceutical supply chain and ensuring zero waste.” This investment covers two major theme areas for Catalyst, which are climate solutions and healthcare, and it gives our investors exposure to the significant development potential of high-end biological pharmaceutical products. “From an impact perspective,” Patil will join the board of directors.

In addition to receiving the money, the business has selected Dr. Remo Gerber to serve as its Chief Financial Officer. Before that, Gerber was in charge of the European operations for the ride-hailing startup Gett, and bestartupat, he was in the order of the procedures for the EMEA region of Groupon.