Al Hassan Ghazi Ibrahim Shaker Company, based in Saudi Arabia, has agreed to acquire a 40% stake in buy now, pay later (BNPL) firm Cashew Payments to help offer more payment services in the region, according to a Zawya report Tuesday (June 21).
Shaker is a Saudi manufacturer of air conditioners and home appliances, and the duo plans to work on the necessary studies for the plan, which will support Cashew Arabia Company for Information Technology (Cashew KSA) in launching offerings for payment solutions in Saudi Arabia.
The investment will help with the smooth integration of Cashew KSA’s BNPL solution with Shaker’s growing direct-to-retail segment, per the report.
“Our potential investment into Cashew KSA is a key milestone in our execution on Shaker’s strategic initiatives of growth and our strong commitment to innovation, and to unlocking new growth avenues within the kingdom’s retail market,” said Shaker Group CEO Mohammed Ibrahim Abunayyan.
He also noted that it would help Cashew KSA roll out its offering “by leveraging the combined established retail expertise and reach of Shaker and Cashew’s technology-led offering, to meet expanding customer demands for BNPL services.”
This comes as the Saudi BNPL sector is likely to grow by 81.2% in 2022, showing that consumer adoption is likely to see sustained growth during that period. The report also said that BNPL gross merchandise value will hit $5.2 million by 2028.
In May, Cashew also secured $10 million in debt and equity financing from local lender Mashreqbank to help out with its expansion.
Ammar Afif, Cashew CEO, said Mashreq had a minority stake but it might increase to 20% if the lender works with future funding rounds. The funding would also help Cashew add credit for larger purchases for travel, education and healthcare.
According to Afif, Cashew will be looking into getting 5,000 merchants and 500,000 users by the end of the year, and the transaction volume is likely to be 10 times higher, hitting $10 million, up from the $1 million it’s sitting at now.