Why Tazapay is using a part of its $16.9M funding to capture the Middle East market
Tazapay is a digital payment platform for businesses engaged in cross-border transactions. Here is why the Singapore-based startup is keen on the Middle East market for expansion.
Last week, , a Singapore-based digital payment platform for businesses engaging in cross-border transactions, raised $16.9 million in a Series A funding round led by Sequoia Capital Southeast Asia. With this funding, the company aims to scale up its business in markets like the Middle East and Europe.
Why the Middle East?
Tazapay helps businesses around the world deliver highly localised customer experiences through local payment methods, and this is highly relevant in the Middle East, a key travel hub that connects Europe to Asia, according to Tazapay.
In particular, Tazapay wants to explore opportunities in the travel and ecommerce sectors in the Middle East.
Online travel agencies and travel/hospitality companies looking to make and receive payments from travellers all over the world have to partner with payment providers in every market. Tazapay aims to make this easy by providing travel companies access to a global payment network, through which they can make and receive payments using the end user’s preferred payment method.
“Middle East has become a big hub for inbound travel into GCC and Africa. We are getting a lot of demand from B2B travel platforms like RezLive, which need to sell travel packages to other travel agents across the world,” says Rahul Shinghal, CEO and Co-founder of Tazapay. “Tazapay’s local collection network helps such platforms to easily collect payments via local payment options.”
Another rising industry in the Middle East that Tazapay wants to capitalise on is the e-commerce business. E-commerce players from the Middle East are seeing a lot of buyers from Africa, Latin America, and Asia, and Tazapay’s platform allows consumers in these markets to make payments via their familiar, local payment method.
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Payments in real time
Open banking and real-time payment network services, such as Singapore’s PayNow and India’s UPI, have increased the expectations of both buyers and businesses with respect to payments in real time.
“Buyers increasingly prefer to use local real-time payments over traditional networks, and businesses are keen to expand globally without going through the hassle of a local set-up,” explains Rahul.
“Tazapay is building the payments and compliance infrastructure for cross-border commerce and services. This is a large space, which is seeing an inflection point.”
Tazapay gives its clients access to over 170 markets for card coverage and over 85 markets for local payment collection through a single API integration. “This gives acceptance to low-cost and secure payments from end customers (buyers) without having to create local entities everywhere,” Rahul elaborates.
To cater to the demand for its services in the Middle East, Tazapay recently set up an office in the UAE. It is looking to build a business development team on the ground to support the needs of the region. The company also plans to build a local collection network for buyers in the Middle East looking to purchase from Asia and/or any other part of the world.
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Market play
Tazapay’s clients include IndiaMART, an online B2B marketplace, which connects over 7.4 million sellers and 165 million buyers; BrightCHAMPS, a global live-learning platform with a presence in over 30 countries; WTX, a used trucks marketplace platform; Rezlive, a global travel platform headquartered in the Middle East; and Advantage Club, an employee engagement SaaS platform.
Tazapay has also partnered with Standard Chartered to offer innovative commerce-enabling payment solutions for enterprise marketplaces.
Globally, the company competes with players such as TransferWire, Veem and Plooto.
“The Tazapay team has unique insights and experience to leverage the tailwind (in cross-border transactions), and Sequoia Capital Southeast Asia is excited to partner with them,” said Aakash Kapoor, Vice President, Sequoia Capital Southeast Asia, in a note shared with YourStory Gulf Edition.
The other investors in the funding round were EscapeVelocity, PayPal Alumni Fund, and renowned angel investor Gokul Rajaram, who joined as new investors in the company. Existing investors Foundamental, January Capital, RTP Global, and Saison Capital also participated in the round.
“The new investors will help us in our vision to be the topmost cross-border infrastructure for global platforms, as we double down on growing our market presence and consolidate every real-time banking network in the world under one API,” says Rahul.
Going forward, Tazapay plans to beef up its core capabilities and add more local payment methods to better serve the growing list of verticals, including education technology and software-as-a-service, besides ecommerce and travel. The company also plans to expand its real-time local collection channels from 85 markets to over 100 by the end of this year with its latest round of funding.
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Edited by Swetha Kannan