UAE-based buy now and pay later (BNPL) startup tabby, has shut down its operations in Egypt five months after launching its service in the country.
The decision folows Egypt’s tight macroeconomic conditions, as it grapples with the economic fallout from a depreciating currency and subsequent high inflation rates. Since March of last year, the Egyptian pound has lost 53 per cent of its value.
“Our company continues to believe in the potential of the market in Egypt. In a short period of time, we have seen very strong adoption of our products and services with some great merchant partners. However, as with any business, we must prioritise projects that align with our long-term goals in core markets, and as a result, we have decided to pause our commercial operations in the Egyptian market,” said Hosam Arab, founder and CEO of tabby.
Arab added that the company would shift its focus towards sustaining its growth in its core markets including the UAE, Saudi Arabia, Bahrain and Kuwait.
“We remain optimistic about the future of the Egyptian market and will continue to assess opportunities to re-engage in the future. We will continue to invest in growing our team on the ground, who will refocus on supporting our core markets,” he explained.
Last month, tabby raised $58 million Series C from Sequoia Capital India, STV and PayPal Ventures, bringing the company’s post-funding valuation to $600 million.
The consumer lending sector has grown recently in Egypt amid a sharp rise in living costs, with over EGP 17 billion in turnovers recorded in 2021 compared to EGP 8.4 billion in the year prior, according to official statements. Moreover, the BNPL sector itself in the country will increase from $1 billion in 2022 to reach $5.8 billion by 2028, according to a report by Research and Markets.