TAG Innovation Pvt., a one-year-old Rawalpindi-based fintech startup has raised over $12 million in the biggest ever seed financing round in the South Asian market.
The financing round was led by NY-based Liberty City Ventures, Canaan Partners, Addition, Mantis, and Banana Capital and others financed the round, bringing YC-backed TAG’s to-date funding to over $17.5 million.
Previous investors in the pre-seed round were Quiet Capital, Fatima Gobi Ventures. Polymath Digital doubled down in this round while Khwarizmi Ventures and the co-founder of Plaid William Hockey also participated, Bloomberg reported.
— Faseeh Mangi (@FaseehMangi) September 22, 2021
This is the firm time many of these investors, including Lee Fixel’s Addition, have invested in a startup in Pakistan. The round reportedly valued the startup at $100 million.
Talking to Tech Crunch, 29-year-old Talal Gondal said, “We are trying to become both Revolut and Paytm in Pakistan.”
According to the Tag’s website, a person can open an account within 3 minutes, the institution provides a person with an IBAN account number to receive funds from anywhere around the world free of charge, it allows you to transfer money to any bank or wallet in Pakistan.
The company allows instant (Peer to Peer) P2P transfers free of charge, Pay utility bills, top-up mobile bills, among other things.
Before starting the fintech, Gondal worked as an investor for seven years in Europe. He told Techcrunch he had long decided to return to Pakistan and start a firm to serve people in his home nation but was waiting for the right moment.
Talking to Bloomberg, he said that there is much more demand in the country than the company anticipated, and many organizations want to board this new phenomenon to digitize their payroll systems.
However, it is worth mentioning that TAG is not alone in this race. Many fintech startups like Sadapay, FINJA, NayaPay, AFT, among others are trying to establish themselves in Pakistan’s market.
The aim of the majority of the companies is to bring the third-largest unbanked population globally in the financial market, with almost 100 million adults without a bank account, and the government is pushing regulations and making changes to bring the unbanked population into the system.
It is worth mentioning that only recently, the State Bank of Pakistan (SBP) has granted FINJA commercial approval for the EMI (Electronic Money Institution) license. It was also the first fintech in Pakistan to receive in-principle approval for this license in April 2020 from the central bank.