Tabby's $4.5B Valuation: A Strategic Play for IPO-Ready Fintech Dominance in the Gulf

The buy-now-pay-later (BNPL) sector in the Gulf is undergoing a seismic shift, driven by a confluence of regulatory innovation, consumer behavior, and fintech ambition. At the forefront of this transformation is Tabby, a Saudi Arabia-based fintech unicorn that recently achieved a $4.5 billion valuation in April 2025, signaling its readiness for an IPO. This valuation leap-from $3.3 billion in February 2025 to $4.5 billion in April 2025-reflects not just financial metrics but a broader strategic narrative of market dominance, regulatory alignment, and product diversification.

A Booming Market with Tailwinds

The Gulf BNPL sector is expanding at an unprecedented pace. By mid-2024, the Middle East BNPL market had reached $5.79 billion, with a projected 19.4% growth in 2025 and a 15.2% compound annual growth rate through 2030, pushing the market beyond $11.7 billion by 2030, according to BNPLs in the Gulf. This surge is fueled by a tech-savvy demographic-particularly expatriate youth in the UAE and young nationals in Saudi Arabia-who favor interest-free installment plans for high-demand categories like fashion, electronics, and home furniture, according to Buy now, pay later growing fast.

Regulatory frameworks are also evolving to support this growth. The Saudi Central Bank now mandates a minimum capital of $1.3 million for BNPL providers, while the UAE enforces caps on consumer exposure (e.g., AED 20,000 or three months' income) and requires credit checks for limits exceeding AED 5,000, according to BNPL in MENA. These measures, while protective, also create a playing field where only well-capitalized players like Tabby can thrive.

Tabby's Strategic Moves: From BNPL to Financial Ecosystem

Tabby's valuation surge is underpinned by its aggressive expansion beyond traditional BNPL offerings. In 2024, the company secured $160 million in Series E funding at a $3.3 billion valuation, led by Blue Pool Capital and Hassana Investment Company, according to a Reuters report. This capital fueled the acquisition of Tweeq, a Saudi digital wallet provider, and the launch of products like the Tabby Card, Tabby Plus, and Tabby Shop, which extend its reach into everyday spending and money management, as covered in Tabby lands $160M.

The company's user base has grown to 15 million across Saudi Arabia, the UAE, and Kuwait, with over 40,000 merchant partners-including global giants like Amazon and Shein-leveraging its platform, according to Tabby Hits $4.5B Valuation. By diversifying into remittances and digital wallets, Tabby is transforming from a BNPL provider into a full-fledged financial services ecosystem, a move that aligns with the Gulf's push for a cashless economy.

Valuation Rationale: Beyond the Numbers

While Tabby has not disclosed Q1 2025 financials, its valuation increase can be inferred from broader trends. The company's annualized transaction volume now exceeds $10 billion, according to Mordor Intelligence. Additionally, its strategic partnerships-such as the collaboration with Checkout.com-have expanded its reach to retailers in the UAE and Saudi Arabia, as noted in a Marketscreener report. The secondary share sale in April 2025, which involved existing shareholders like HSG and Boyu Capital, did not dilute the company but instead signaled investor confidence in its long-term trajectory, according to a Yahoo Finance report.

The valuation also benefits from a favorable macroeconomic environment. For instance, Alerus Financial Corporation reported a 105% year-on-year jump in net income in Q1 2025, reflecting disciplined integration and growth strategies, as shown in a GlobeNewswire release. While not directly comparable, such performance underscores a market where operational efficiency and strategic execution justify premium valuations.

IPO Readiness: A Path to Global Recognition

Tabby's IPO timeline, set for late 2025 or 2026, is supported by a team of financial heavyweights: HSBC, JP Morgan, and Morgan Stanley are advising the company, with the Saudi Exchange as a potential listing venue, according to a PanFinance article. This alignment with global banks and a regional stock market highlights Tabby's dual appeal-both as a Gulf fintech leader and a global investment opportunity.

The company's CEO, Hosam Arab, has emphasized that the IPO will not only provide liquidity for early investors but also accelerate Tabby's mission to democratize financial services in the region, as Reuters reported. With its valuation now at $4.5 billion, the question is no longer whether Tabby can dominate the BNPL sector, but how quickly it can scale its ecosystem to meet the Gulf's evolving needs.

Conclusion

Tabby's $4.5 billion valuation is a testament to its strategic foresight in capitalizing on the Gulf's BNPL boom. By diversifying its product suite, securing regulatory compliance, and building a vast merchant network, the company has positioned itself as a fintech powerhouse. As it prepares for an IPO, investors are likely to view Tabby not just as a BNPL provider, but as a catalyst for the region's financial transformation.