Lahore-based Taro raises $3.5mn in pre-seed funding

Taro Technologies, a Lahore-based emerging fintech startup, has secured $3.5 million in pre-seed funding through a combination of strategic partnerships and angel investors to launch a Buy-Now, Pay-Later (BNPL) venture in Pakistan.

As part of their pre-seed round, Taro partnered with Dubai-based Cashew Payments – a BNPL leader in the Gulf Cooperation Council (GCC) – to accelerate its 2022 Q1 launch and growth, read a statement.

Mustafa Khan, CEO of Taro and former Silicon Valley Apple engineer, stressed that this partnership will enable Taro to be an established player.

“Our collaboration with Cashew provides critical insights into risk, merchant acquisition, operations, and customer retention. Those insights paired with support from their experienced and accomplished leadership team position us for a strong launch and to quickly dominate the market.”

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Ammar Afif, CEO of Cashew, said, “We are delighted to partner with Taro, in providing 'Buy now, Pay later' solutions for merchants and consumers in Pakistan."

"As we've grown our business in the GCC, we recognised the need for retailers in Pakistan to have a seamless way of offering flexible payment options to consumers in multiple industries."

Mustafa, now based in Lahore, is currently looking to expand his local network.

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“I am thrilled to be launching BNPL in Pakistan through Taro. I’ve noticed Pakistanis are eager for access to new technology that puts them in control. By offering lending services to a wider range of people, we can help provide the control and flexibility they desire,” said Mustafa.

Pakistan’s e-commerce sector has seen impressive growth in 2021, with a spend of around $7.2 billion. Taro seeks to provide easy access to credit to all Pakistanis, allowing increased access to e-commerce outlets.

Pakistan's startups witnessed a stellar run in 2021, generating over $324 million in during the year, according to KASB's report titled '2021 Remember The Year: Stellar For Pakistani Startups’.

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During calendar year 2021, Pakistani startups finally made their presence felt in the international arena, raising over $324 million, as compared to $60mn raised in 2020, but also more than the amount raised in all previous years combined.

The number of deals also jumped to 59 from 31 the year before, witnessing a surge of 90pc. Meanwhile, the ticket size per stage is on the rise, as an average deal size has increased 2.8x to $5.5 million, added the report.

“Under 'fintech revolution', startups are finding investors eager to tap the third most unbanked economy,” said the report.

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Meanwhile, rising digital adoption in Pakistan is also providing a big opportunity for the startups to revolutionise the traditional processes in various sectors, added the report.