$100 million startup: TAG Fintech is ready to enter new markets, Alexander Lukianchuk

December 31, 2022

TAG Fintech was focusing on one market last year. Thanks to the ideas of founder Talal Gondal and the experience of CTO of TAG Fintech it was possible to open an account for those who previously had no access to banking services in Pakistan.
Alexander Lukianchuk, TAG Fintech: “Pakistan undoubtedly has its own quirks. It is one of the largest countries with a highly outdated banking infrastructure. Most people have no access to banking services. At the same time, the market here presents endless opportunities for growth, the population of Pakistan is over 225 million and is increasing every year. Mobile communication is evolving, high penetration of 4G mobile networks together with high growth of smartphone ownership. This market clearly needs quality financial services, and I expect the rapid growth of companies that can successfully enter this market”.
In 2021, the startup raised $5.5 million in Pre-Seed investments before joining  Y-Combinator. This deal was one of the largest pre-seed deals in the Middle East, Africa, and Pakistan region.
According to Alexander Lukianchuk, TAG Fintech could become one of the most valuable startups. The total investment amounted to more than $12 million, and the latest investors valued the company at $100 million.
Alexander Lukianchuk: TAG Fintech and emerging markets perspectives
There are existing financial services providers  in emerging markets but the quality of user experience and customer service in general remains a weak point of many of them. 
Another significant challenge is delivering the breadth of the functionality. Getting high quality product with broad functionalities is quite expensive and requires significant resources and time. It is difficult for each individual startup to obtain such resources and therefore it is difficult to compete. It is not very convenient to use a service that performs only a few of the necessary functions.
“In the coming years we will see consolidation in Western markets, smaller players will be absorbed by market leaders, models will be copied and become better. The result will be a more integrated infrastructure for consumers and regulators”, specified Alexander Lukianchuk.
Another driver in the West is integration. Services of different companies successfully interact with each other. A good example in this area is Open Banking solutions, we see an update of this trend and a number of successful solutions have already appeared. The situation is different in emerging markets. Financial services are provided mainly by traditional banking tools and the established banking sector is difficult to go through the stages of transformation.
It is therefore necessary to look at neobanking, if the task is to open access to services with minimal procedural restrictions.
“In the West, the market is definitely more competitive. Asia is different. For example, China and Singapore already have a well-developed financial infrastructure. However, many other Asian countries still represent a Green Field Opportunity for payment services and other banking services”, specified Alexander Lukianchuk.
TAG Fintech transformation and entering new markets
As everyone know, after the launch the startup faced issues with EMI licensing. At the moment we are working on restoring the right to carry out activities. Regulatory issues turned out to be more significant. It is one thing to create a product, and quite another to launch it in a market that isn’t used  to it.
Commenting on the problems with the license, the CTO of TAG Fintech said that the key mistake at the point of entry into the market was to underestimate the political aspect in dealing in the country. Pakistan is a relatively closed system, where it is difficult to enter and start a business. Working in western markets, more time is spent on technology and product, but in Pakistan the team has spent a lot of resources and energy on politics and bureaucracy.
“If you do not understand the rules of the market you are entering, it is a huge mistake. But I think we have learned it and are ready to move on”, said Alexander Lukianchuk.
Currently, the company plans to expand the geography of business activity. In particular, the options of entering other regional markets, where there is an opportunity for innovative financial services.
Most likely, it will be possible to attract new investments and grow outside of Pakistan during the first half of 2023.
More details of press release visit website.
Media ContactCompany Name: TAG FintechContact Person: LukianchukEmail: Send EmailCountry: United StatesWebsite:

© 2023