Tag, a year-long startup offering banking and financial services to users in Pakistan, has raised more than $ 12 million in what is now the largest seed funding round in the South Asian market.
Liberty City Ventures, Canaan Partners, Addition, Mantis and Banana Capital and others funded the round, bringing the YC-backed Tag increase to date to more than $ 17.5 million. This is the time that many of these investors, including the addition of Lee Fixel, have invested in a startup in Pakistan.
Round values are labeled at $ 100 million. The new round of funding took just two weeks to close, Tag founder and CEO Talal Gondal told TechCrunch in an interview. He declined to comment on the valuation.
Investor excitement today comes as the startup builds one of the crucial railways for users in Pakistan. “We are trying to become Revolut and Paytm in Pakistan,” said the 29-year-old founder.
Day partners with public and private companies to offer their employees banking services that include obtaining their salaries in the Tag account and virtual and physical cards with Visa technology. Signing up for Tag, which includes some verification of an individual’s identity, only takes three minutes, he said.
It also provides a range of B2C offerings such as the ability to pay someone online and top up utility bills that are available to any user in Pakistan who signs up for the platform.
“Over time we want to offer the full suite of banking and financial services to Pakistani users,” he said.
Before starting the day, Gondal worked as an investor for seven years in Europe. He said that he had long ago decided to return to Pakistan and start a company to serve the people in his home country, but that he was waiting for the right moment.
Pakistan’s startup ecosystem has gotten a boost this year with the arrival of high-profile investors, including those backing the label, as well as Harry Stebbings’ 20 VC, Josh Buckley’s Buckley Ventures.
A group of very young startups have made eye-catching funding announcements in recent weeks. Fast trade startup Airlift unveiled a record $ 85 million Series B last month, followed by the record $ 30 million Series A round of Business-to-Business Bazaar. Last week, the BridgeLinx digital freight market announced a $ 10 million seed round, which at the time was the largest in the country.
Gondal said startups are finally having a moment in the South Asian market. “The startup ecosystem in each country goes through several waves. In India, we saw e-commerce companies like Flipkart flourish in the first wave. Companies like Ola, Zomato and Swiggy and financial technology companies like PhonePe and Paytm made inroads into the waves after that, ”he said, adding that he saw the same thing in Berlin.
“He was convinced that something similar would happen in Pakistan.”
Gondal said the startup is now working to expand its product offering and hire talent to gain the trust of the market.
“Liberty City Ventures is proud to support a visionary leader like Talal in his efforts to expand financial inclusion for the underserved and the unbanked,” said Murtaza Akbar, managing partner of Liberty City Ventures, in a statement. “We look forward to the world-class team that he has assembled at TAG to build a regional Fintech powerhouse.”