TAG Innovation Pvt. received $12 million in funding from investors including Liberty City Ventures and Canaan Partners in New York. The company plans to use the funds to capitalize on the growing popularity of digital payments in Pakistan.
Liberty City led the fundraising for the Rawalpindi-based company, which also included participation from Addition LP, Mantis Venture Capital, and Banana Capital LP, Chief Executive Officer Talal Ahmad Gondal said in an interview. Quiet Capital and Fatima Gobi Ventures were previous investors in the pre-seed round. Polymath Digital increased its investment in this round, which was also attended by Khwarizmi Ventures and Plaid co-founder William Hockey.
The company is valued at $100 million following the funding. The valuation compares to an average of $386 million for Pakistan’s 21 publicly traded lenders. Gondal did not respond to a request for comment on the valuation.
Asia’s fintech startups are attracting significant investor interest as an increasing number of people embrace digital payments in the aftermath of the pandemic, particularly in countries where a sizable portion of the population lacks access to formal banking. Xendit, a payment service provider for businesses in Indonesia and the Philippines, has grown to a billion-dollar valuation.
According to the World Bank, Pakistan has the third-largest unbanked population in the world, with approximately 100 million adults without a bank account. TAG began offering financial services to a limited number of customers last month after receiving approval from the State Bank of Pakistan to conduct pilot operations as an electronic money institution.
“Demand has exceeded our expectations,” said Gondal, 29, a former executive at Amazon.com Inc. “In addition to the numerous retail customers still on the waiting list, we have been approached by several organizations interested in digitizing their payroll systems, which have previously been conducted in cash.”
The world’s fifth-largest economy is experiencing record startup funding, with many venture capitalists investing for the first time. This year, they raised more than $250 million, which is more than they raised in the previous six years combined.