The startup conducts background checks on potential business partners for small and medium-sized enterprises (SMEs) and sets up a digital escrow to protect their payments.
(From left) Arul Kumaravel, co-founder and CTO of Tazapay, Rahul Shinghal, co-founder and CEO of Tazapay, and Saroj Mishra, co-founder and COO of Tazapay / Source: Tazapay
What’s the problem that your startup is trying to solve?
Shinghal: It can be hard to feel confident about a new international trade partner, particularly if they are unable to meet in person. This leads to a significant number of deals falling through, slowing the growth of businesses as well as local and regional economies.
International trade still remains paper-based, and Tazapay is committed to helping SMEs digitalize their processes.
How is your startup solving the problem?
Tazapay provides SMEs with fast and simple background checks on potential business partners by holding funds securely until both parties have confirmed and fulfilled their obligations of the trade.
We also offer digital tools that allow SMEs to streamline their processes and move faster with deals. For example, we can conduct a background check in just 24 business hours.
Who is your target customer?
Any SME that wants to boost its international trade opportunities, especially the ones with under US$5 million in annual turnover and fewer than 20 employees. Most of these companies trade in products like apparel and fashion, medical and personal protective equipment, and other finished products.
Why is this the right time for your startup?
We launched Tazapay in early 2020 and realized that the timing couldn’t have been better. Traditionally, SMEs looking to work together often travel to meet, build rapport, and assess the company’s operations.
Travel restrictions in Asia due to the Covid-19 pandemic have led to an increasing trust deficit between potential business partners.
Why is your team best positioned to solve this problem over others?
Members of the Tazapay team previously held senior roles at Standard Chartered, Stripe, Grab, PayPal, and Nium, among others.
Our team brings the right combination of experience and insight to tackle issues in business-to-business (B2B) trading.
What are the major comparable companies that offer a solution similar to yours? And how different is your startup from theirs?
There’s currently no existing service like ours. For large transactions, banks have always offered letters of credit, but these can be unwieldy and inaccessible for small businesses.
Tazapay is committed to embracing this complexity by providing a fully digital platform that’s not only easy to access and use, but it can also be integrated into a merchant’s workflows.
How big is the market opportunity?
The total addressable market for SME B2B cross-border trade is in the area of US$8 trillion globally and US$500 billion in Southeast Asia. We expect the addressable market to grow at a compound annual growth rate of 25% in the next five years.
How do you know you’ve found product-market fit?
When our customers tell us that they could go through with their deal because of Tazapay, we know that we have a product-market fit to our business. We also aim to scale the product-market fit.
What’s your revenue model?
Our primary revenue model includes a transaction fee of 1.8% capped at US$500. We’re also planning to offer services like credit and inspections, among others.
What’s your distribution strategy?
We’re focusing on small businesses in Southeast Asia through digital channels and sales teams. We work with B2B marketplaces to offer escrow as a service. We also believe that content marketing is durable and gives us long-term benefits.
What’s your fundraising history?
We have raised almost US$5 million from Sequoia Capital India’s Surge, Saison Capital, January Capital, and RTP Global.