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New revelations shed contemporary gentle on happenings inside troubled fintech startup TAG



New revelations have come to the fore concerning circumstances at fintech startup TAG within the lead-up to the suspension of the pilot operations and investigation by the State Financial institution of Pakistan (SBP), which initially began with the tampering with a doc within the software to purchase a majority stake in SAMBA Financial institution.

It is a creating story and Revenue will preserve updating particulars about what transpired at TAG as extra info surfaces. 

A high-ranking supply at TAG Innovation’s (TAG Pakistan) board disclosed particulars to Revenue concerning the circumstances resulting in the suspension of TAG’s pilot approval and investigation by the State Financial institution, which initially started when founders Talal Ahmed Gondal and Ahsan Kaleem Khan disclosed to an official on the firm {that a} cast doc had been submitted to the central financial institution for the SAMBA bid, and that the State Financial institution had come to find out about it by the investor whose letter had been purportedly doctored earlier than submission as a part of the bid to start due diligence. 

The founders had additionally been concerned in embezzling investor cash they usually had been eliminated promptly from the corporate as a result of their actions may compromise whole TAG’s fintech operations in Pakistan, he says.

On February 10, a letter from Hong Kong-based TTB Companions committing a $45 million funding for SAMBA acquisition by TAG Fintech, the Delaware-based holding firm of TAG Innovation in Pakistan, had been submitted to the State Financial institution.

In response to the supply, round February 25, the central financial institution sought a affirmation from TTB Companions of the $45 million dedication for the SAMBA acquisition to verify their participation within the SAMBA acquisition bid and the quantity they’d dedicated as per the letter, understood to have been written by Talal due to his fundraising position as CEO, however despatched to the State Financial institution by the opposite cofounder Ahsan Khan.  

On the night time of February 27, TTB Companions disowned the letter TAG had submitted to the State Financial institution for the acquisition. Consequently, on February 28, a gathering was referred to as at TAG Innovation Pvt Restricted (TAG Pakistan) which was headed by a high-ranking firm official to evaluate the implications of the offense dedicated and repair duty. 

It’s crucial to notice that the bid to amass SAMBA Financial institution was submitted by TAG Fintech Pvt Restricted, which is the Delaware-based holding firm of TAG Innovation Pvt Restricted in Pakistan, the fintech startup within the race to turn out to be an Digital Cash Institute (EMI). The one official at TAG Fintech within the US was CEO Talal Ahmed Gondal, who was additionally the CEO of the Pakistani entity.

In response to one other supply on the firm, no different official of TAG in Pakistan was affiliated with TAG Fintech within the US in any official capability besides CEO Talal. Although cofounder Ahsan Khan has a shareholding in TAG Fintech in addition to Alex Luchianchuk, the CTO of TAG in Pakistan.

After the three shareholders, the remaining pool was allotted for workers below the worker inventory choice plan.

For the reason that SAMBA bid was submitted by TAG Fintech, any offense dedicated by TAG Fintech official additionally affiliated with TAG Pakistan may compromise the Pakistani entity which has been gunning to safe the EMI license since 2020 and has raised multi-million greenback funding.

In response to the supply on board of the fintech startup, an inquiry was carried out to repair duty as a result of offenses like tampering with official paperwork may danger motion by the Federal Investigation Company (FIA) and the SBP had proven an inclination to contain FIA within the matter.  

On March 28, the identical day the interior assembly at TAG was held, Talal Gondal, in his capability because the CEO of TAG Fintech, wrote to the central financial institution to withdraw the bid for the SAMBA acquisition and in addition determined to step down as CEO of TAG Innovation.

Subsequently, on March 1, Talal wrote his confession admitting to doc tampering below his oversight, however pleaded negligence as a substitute of ill-intention, and in addition formally stepped down because the CEO of TAG in Pakistan. Stepping down because the CEO, Talal was additionally stopped from any involvement within the firm operations.

Within the interim, Talal determined to provide the helm of all operations to Ahsan Khan who took over because the CEO following Talal’s resignation.

The supply additionally revealed that following these developments and primarily based on mutual understanding, Talal and Ahsan determined to withdraw funds from the corporate accounts of TAG Fintech in addition to TAG Innovation, and subsequently an quantity of $350,000 was transferred by Talal to Ahsan, in addition to one other sum withdrawn by Ahsan Khan on account of paying salaries to staff which included funds to his brother Tayyab Kaleem Khan.

The $350,000 quantity, which Talal claims Ahsan withdrew illegally from the TAG Fintech account, was revealed to have been transferred by Talal himself to Ahsan. Alternatively, in his June 16 letter to traders, Ahsan claimed that Talal had withdrawn in extra of $1 million from TAG Fintech and TAG Innovation accounts.

The SBP was subsequently advised that in addition to forgery of the investor letter, founders together with Ahsan this time had withdrawn investor cash from firm accounts and moved them to non-public accounts. 

The supply additionally tells Revenue that Ahsan was additionally subsequently faraway from the corporate for his conduct. The high-ranking supply additional says that each the cofounders had been eliminated with the consent of an investor in TAG, whose identify was not disclosed.

The SBP was saved within the loop about all of the modifications as a result of being the regulator, it must be saved knowledgeable of modifications in key positions at monetary establishments. In response to the supply, the cofounders had even determined to dissolve the corporate at one time limit due to the fiasco they’d created.

On March 17, a high-ranking official at TAG wrote a letter to the SBP as a follow-up to TAG’s request from February 28 to withdraw the bid for the SAMBA acquisition. Within the letter, Talal’s confessional assertion, in addition to his resignation letter, was hooked up.

Within the run-up, the supply says that the manager chairman of the corporate was requested by the SBP to take further cost of the CEO on March 18.

Just a few weeks later, on April 11, the State Financial institution suspended pilot operations of TAG and issued a show-cause discover addressed to Talal, CEO of TAG Fintech, and to CEO TAG Innovation, in search of a proof “as to why motion shouldn’t be taken in opposition to the sponsors, board of administrators and administration when it comes to relevant legal guidelines, guidelines and rules” following submission of a tampered doc.

The SBP highlighted within the discover that its findings close to the tampered investor letter solid critical doubts on the integrity, honesty, and repute of the sponsors, board of administrators, and administration.

In response to the supply, in response to the SBP discover, the central financial institution was knowledgeable that TAG Fintech CEO Talal, who was additionally the CEO of TAG Innovation, doctoring the investor letter was not ill-intention however negligence. Additional, the cash that was illegally withdrawn from TAG Fintech accounts was achieved primarily based on mutual understanding of the founders, Talal and Ahsan, and that the remainder of the administration at TAG Innovation had no visibility on TAG Fintech accounts.

The SBP was additional apprised that each the founders had confessed to their acts and had been sidelined from the corporate. As a result of none of those actions had been achieved on TAG Innovation’s platform, any such actions at TAG Fintech within the US shouldn’t ideally have an effect on TAG Innovation’s operations in Pakistan.

The high-ranking supply on the board additionally states that contemplating that each the founders had been very younger, the State Financial institution was requested to take a compassionate stance on the actions of the founders who acted overenthusiastically.

The supply additional tells Revenue {that a} high-ranking TAG Innovation official has since been making efforts to save lots of the corporate from struggling due to the fiasco created by the founders. “TAG has poached and collected very high-end human useful resource expertise and if this firm retains working, it should preserve offering employment to all these individuals,” the supply says.

Due to this fact, in response, the SBP was additionally advised concerning the human useful resource employed by TAG Innovation which shouldn’t be affected adversely due to the actions of the founders, particularly since they had been eliminated and had been now not within the administration of TAG Innovation.

It was additional revealed that after each the cofounders had been faraway from C-level positions within the fintech startup, some extra discrepancies had been found. It was discovered that the CTO of the corporate, Alex Luchianchuk, was by no means disclosed as a shareholder in TAG Fintech to SBP.

In response to one other supply, below the EMI rules, shareholders with 5-10% shareholding within the holding firm are required to clear match and correct take a look at by the central financial institution. Alex, in line with the supply, owns 10% shareholding, due to this fact, the non-disclosure of Alex, the TAG CTO, as a shareholder to the SBP by TAG Fintech CEO Talal Gondal was one other offense that was dedicated by him. 

Revenue regrets that this model couldn’t be added to the unique story however might be updating the story with all of the variations as they floor


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With $2.5m in seed funding, Neem units sights on scaling banking as a service  



LAHORE: Pakistan’s embedded monetary providers platform Neem Exponential has raised $2.5 million in seed funding to construct and scale monetary wellness centered Banking as a Service (BaaS) and lending providers.

The funding got here from native and world monetary expertise buyers which embody Korean SparkLabs Fintech, Arif Habib Ltd and Cordoba Logistics and Ventures Ltd., Taarah Ventures, My Asia VC, Idea Vines, and Constructing Capital. 

The spherical was additionally joined by companions at Outrun Ventures and strategic angels as CSO of tech home BPC, founding accomplice at Mentors Fund, in addition to fintech veteran and ex-CEO of Seccl and others. An inside doc shared with Revenue confirmed the quantity of the elevate. 

Based in 2019 by Nadeem Sheikh, Vladimira Briestenska and Naeem Zamindar, Neem is an embedded finance platform centered on offering monetary wellness for the underbanked communities in Pakistan. The startup offers customised platforms for communities served by its companions for embedded monetary providers, and undertakes microlending.

Neem presently requires a license from the Securities and Alternate Fee of Pakistan (SECP) to function as a non-banking monetary firm (NBFC) and undertake the lending enterprise. The SECP has instructed Revenue that Neem has not obtained an NBFC license but. 

Nadeem Sheikh, the cofounder and CEO of the corporate instructed Revenue that they’re presently lending via companions which have these licenses. Whereas Sheikh couldn’t identify these companions, he confirmed that they had been licensed and that Neem was lending via these associations.  Based on Nadeem, Neem is presently within the means of getting a license. 

Pakistan has a really massive unbanked inhabitants with an estimated 100 million adults with out a checking account, and entry to credit score beneath 10 per cent.

Pakistan has, subsequently, for lengthy had a monetary inclusion drawback. Fintech startups in Pakistan have been centered on rising this entry to a checking account and credit score services. There are different elements too, nonetheless, which require management over for higher determination making and consequently a greater general monetary well being. Neem does precisely that for customers in addition to MSMEs. 

At Neem, monetary wellness underlines management over 4 elements for a greater general monetary well being: funds, the place individuals have management over the funds and have an environment friendly approach of doing it; credit score facility which is affordable in step with what they should develop, for instance for working capital; insurance coverage which is a safety plan; and financial savings and investments for future. 

“Our plan is absolutely to allow all of these elements over time,” Nadeem Sheikh tells Revenue. “Among the elements we have already got in place and we’re constructing the tech construction and enterprise structure by creating the correct set of partnerships to have the ability to present that full spectrum of merchandise to advertise customers in addition to the SMEs.”

Neem works on the idea that since Pakistan’s underbanked inhabitants could be very massive and entry to credit score is proscribed, there’s a massive alternative to supply providers throughout the complete monetary wellness spectrum.

Neem subsequently builds speacialised platforms for its companions beneath its Banking as a Service (BaaS) vertical for distribution of monetary wellness merchandise. As an example, Neem has a three way partnership in place with South African fintech firm Kuunda with which it has developed a credit score scoring platform for one in all its companions to disburse working capital loans to kiryana retailers.

Equally, Neem might construct a specialised platform for sure necessities of a accomplice which is serving the underbanked in, as an example, the agriculture sector. Neem’s BaaS platform might pertain to having embedded funds, lending, market and insurance coverage options.

The corporate additional has a lending arm for disbursement of micro loans to customers and SMEs, and makes use of anonymised information from companions to evaluate credit score worthiness for disbursement of such loans. The loans are offered to finish clients of the identical companions for assembly their working capital necessities, say for replenishing stock at a micro retailer. 

Neem subsequently operates as a B2B2C enterprise. 

“We consider that particularly in rising markets, having spent plenty of time pondering and working in different markets as founders, there’s a very low degree of belief relating to monetary establishments and monetary providers,” Nadeem Sheikh, cofounder and CEO at Neem Exponential tells Revenue

“So you must construct that belief with individuals in communities, whether or not it’s the agricultural group, the SME group; individuals in logistics or individuals in eCommerce and so forth. It’s important to allow them on the place they’ve already transacted. So we’re constructing the platform primarily based on entry and belief to these communities to allow the correct of merchandise to these clients.”

Nadeem says each lending and BaaS are main enterprise verticals for the corporate, which is searching for to be worthwhile inside a couple of years. The corporate plans to spend the funds on constructing the expertise stack, including merchandise and classes and finishing a number of the capitalisation necessities to develop the lending portfolio. 

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Pakistan’s SnappRetail raises $2.5m to digitise retailers, because it plans countrywide growth



Retail digitiser SnappRetail has raised $2.5 million in pre-seed funding to scale its providing all throughout Pakistan.

Revenue has seen the startup’s inside paperwork to substantiate the quantity of the increase. The spherical was led by Zayn Capital’s BitRate Fund with participation by Antler and Century Oak Capital.

SnappRetail gives micro and conventional retailers in Pakistan with a collection of digital options to assist them stay related and aggressive. Co-founded in 2021 by Unilever alumni Adeel Rasheed and Moazzam Ali Khan, Ahsan Aziz who has labored at TRG, and Moiz Ali who’s a former Primatics Financials worker, SnappRetail provides retailers level of sale (POS) instruments and a digital working platform.

The microenterprise system helps store homeowners handle end-to-end operations that assist conventional retailers develop their margin and income whereas serving to micro-retailers take away inefficiencies of their operations and enhance money flows. The choices of the startup assist such retailers develop in face of powerful competitors from trendy supermarkets.

By way of the deployment of SnappRetail POS {hardware} and a sales-driven knowledge optimization working system, SnappRetail will present them entry to micro-credit by means of companion banks and fintech firms for working capital, capacity to just accept digital and card funds, unlock price efficiencies and develop their gross sales.

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PostEx acquires Name Courier to develop its logistics community, awaits NBFC license



Pakistan’s logistics and fintech firm, PostEx, has introduced the acquisition of Name Courier, a competing eCommerce logistics resolution supplier, for an undisclosed quantity. 

PostEx operates a hybrid of receivables factoring resolution and courier service that pays bill values upfront to eCommerce corporations providing Money on Supply (COD) as one among their modes of fee. Name Courier, then again, is without doubt one of the nation’s largest eCommerce COD logistics supplier. 

The announcement comes because the financial scenario takes a downturn, leaving companies in a scenario of disarray. PostEx’s competitor Trax Logistics not too long ago laid-off employees due to the dip so as volumes and rising prices.

PostEx itself has additionally laid off employees, which firm founder Muhammad Omer says was an motion taken in opposition to 20 folks due to alleged organised theft on the firm. Nevertheless, Revenue has a sign that the variety of layoffs could also be greater than this.

The acquisition is prone to create synergies for PostEx which it goals to leverage for increasing its receivable factoring enterprise, in addition to capturing the market on the again of an unlimited logistics community, however could possibly be confronted with a dip in volumes due to the macroeconomic scenario.

PostEx background

The Lahore-based startup introduced elevating $8.6 million in seed funding final 12 months. This was the second largest seed spherical within the nation at the moment. The startup additional says it has raised an quantity not introduced but. 

In Pakistan, cash-based funds type the overwhelming majority of the financial transactions which creates liquidity issues for eCommerce companies due to the lengthy money restoration cycles for cash-on-delivery orders. Inefficient logistic infrastructure creates last-mile supply challenges which result in excessive cancellations for retailers. 

Based in 2019 by Omer Khan, Saad Mahmood, Babar Razzaq, and Adil Naseem, PostEx’s fintech-first platform addresses each challenges by offering upfront funds on money on supply orders, complemented by an in-house logistics fleet for eCommerce companies, thereby serving to companies develop by way of simple and immediate entry to money and liquidity and seamless supply expertise. 

As per Omer Khan, CEO of PostEx, “We provide an embedded resolution to eCommerce gamers who  in any other case must depend on standard courier providers that roughly full the entire course of from selecting up the parcel to paying the proceeds to the seller in 15 to twenty days.”

The founder additional claimed to have greater than 8,000 eCommerce platforms onboard and a mixed (PostEx + Name Courier) quantity of 1.3 million COD deliveries a month, which makes them larger than TCS in COD deliveries. 

In the meantime, Swyft Logistics additionally claims it has reached a scale of 60,000 COD deliveries day by day, which makes Swyft additionally larger than TCS. As per sources, TCS delivers about 1 million COD orders per 30 days, which comes right down to about 33,000 orders per day.

PostEx additional claims that it has achieved a disbursement scale of round $15 million in month-to-month financing. The quantity appears unusually excessive since even some main digital finance operators don’t clock in such numbers. Working example, Jazz Money had a closing portfolio for digital lending of round Rs2 billion whereas complete mortgage disbursements grossed as much as Rs10-12 billion in 2021.

This equates to annual lending of $60 million and month-to-month disbursements of $5 million if the trade price is taken into account to be Rs200 over the interval. 

On high of it, the founder additionally informed Revenue that the default price was lower than 1% because the lending is totally collateralized in opposition to the underlying asset which on this case are the parcels. “The one NPLs we incur are because of misplaced parcels.” He reiterated.


Name Courier, as per the founder, is the third largest eCommerce COD logistics supplier within the nation with greater than 40,000 deliveries accomplished day by day. PostEx is aiming to scale its logistics operation by the current acquisition. 

Following the acquisition, Name Couriers CEO Jawad Mirza goes to move the logistics enterprise of PostEx, whereas additionally occupying a seat on the PostEx board of administrators. 

As per the founder, the clientele of Name Courier would assist them entice prospects for every particular person service (logistics and financing) relatively than simply going for the embedded product (COD financing + final mile logistics). 

Additional, PostEx is counting on leveraging the eCommerce vendor knowledge obtained after the merger to reinforce its credit score scoring course of. The fintech participant evaluates the purchasers on a number of parameters earlier than extending credit score. These embrace; credit score historical past, parcel return ratio and variety of transactions. 


Whereas the corporate gives a number of merchandise, lending stays the first money driver. As per the founder, “We cost round 3.5% to 4% from distributors and given the truth that the enterprise has an especially quick money cycle, we’re in a position to turnover our financing capital 7 to eight instances a month. Subsequently, our lending can generate month-to-month returns between 20% to 30%.” 

But, the scalability of this enterprise is restricted because of the truth that it’s completely fairness financed. Nevertheless, the founder claims to have obtained a credit score line of Rs1 Billion from a financing establishment which will be deployed for revenue-based financing as soon as the NBFC license is obtained from SECP. 

Founder Omer Khan says that the corporate has solely obtained NOC to use for an NBFC license up until now. Nevertheless, in response to our sources, the SECP is reluctant to problem new licenses due to the hue and cry across the predatory nano lending apps.

The SECP can also be weighing if the market has room for therefore many NBFC gamers, and has round 40 purposes pending approval for the license. 

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