DUBAI - Gulf fintech Tabby has more than doubled its valuation to $3.3 billion after completing a new funding round, as the buy now, pay later (BNPL) firm prepares for a stock market listing within 18 months, its chief executive told Reuters.

The company raised $160 million in a Series E financing round led by existing investors Blue Pool Capital, a Hong Kong-based investment firm backed by Alibaba's co-founder Joe Tsai, and the Saudi pension fund's investment arm Hassana Investment Company.

Tabby was valued at $1.5 billion when it closed a previous funding round in late 2023.

Customers can use Tabby, which counts Abu Dhabi sovereign wealth fund Mubadala among its backers, to defer paying for purchases. Founded in 2019, it has tied up with more than 40,000 brands and businesses including Amazon and fast-fashion retailer Shein in markets such as Saudi Arabia and the United Arab Emirates.

BNPL soared in popularity after the COVID-19 pandemic forced more shoppers online. Regulators in Britain and the United States have previously warned about its use, saying consumers needed to understand the risks.

Other existing Tabby investors STV and Wellington Management participated in the latest funding round.

"It really is around just making this next leap for the business, from a pure buy-now-pay-later business to a lot more than just that," CEO Hosam Arab told Reuters in an interview when asked how the new funding would be used.

Arab said Tabby, which last year acquired Saudi-based digital wallet operator Tweeq for an undisclosed sum, wanted to keep investing in its product range including digital spending accounts, cards, payments and money management tools.

The company, which is targeting 20 million users by the end of the year, is looking to float in the next 18 months, with Saudi Arabia among the potential listing venues, Arab said.

Tabby has hired HSBC, JP Morgan and Morgan Stanley to work on the IPO, according to a source with knowledge of the matter.

The three banks declined to comment.

The Gulf's stock markets have seen a wave of new IPOs in recent years, aided by the region's governments trying to diversify economies away from oil.

Arab said that "a lack of tech and growth businesses in the public markets in the region" could help Tabby appeal to investors.

(Reporting by Federico Maccioni Editing by Tommy Reggiori Wilkes and Susan Fenton)