Seeking to leverage the growing popularity of digital payments triggered by the pandemic, Pakistani FinTech startup TAG has raised $12 million and reached a valuation of $100 million, Bloomberg reported Wednesday (Sept. 22).
The funding round was led by New York-based Liberty City Ventures and Canaan Partners, with participation from Addition LP, Mantis Venture Capital, Banana Capital and the co-founder of Plaid, William Hockey.
About 100 million adults in Pakistan are without a bank account, according to the World Bank, making Pakistan the third-largest unbanked population in the world. This means that there’s a huge need to close the financial inclusion gap.
In an interview with Bloomberg, TAG CEO and founder Talal Ahmad Gondal said that the current demand has exceeded the company’s initial expectations. “Other than many retail customers still on the waiting list, we have also been approached by several organizations to digitize its payroll system that have been dealing in cash until now,” said the 29-year-old entrepreneur, who was previously an executive at Amazon.
The one-year-old Rawalpindi-based startup offers banking financial services in the South Asian market, enabling local public and private firms to pay their employees’ salaries on TAG accounts and virtual and physical cards powered by Visa. It takes users only three minutes to sign up on the platform, after which they can make payments online and top up utility bills.
Related: Foreign Investors Pour Millions Into Pakistan’s FinTech Startups
The ongoing investment boom in the world’s fifth-most populous nation shows no sign of slowing down as foreign investors continue to inject record amounts of cash into its startup industry. Local startups have raised over $250 million so far this year, exceeding the amount raised in the previous six years combined.
In June, PYMNTS reported that local startups recorded $19.3 million in investments in the first quarter of this year alone, of which almost $15 million came from foreign investors.
Read more: Pakistan’s BridgeLinx Raises $10M in Seed Funding Round
Prior to TAG’s $12 million round, BridgeLinx’s recent $10 million foreign investment was Pakistan’s largest seed capital investment. The 9-month-old company is seeking to consolidate Pakistan’s fragmented trucking and logistics industry by connecting large companies with trucks and offering manufacturers lower transport fares.
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