Doing business in Zimbabwe has got tougher over the last few years, for businesses of all shapes and sizes. For agri-tech startup Zazu, it meant taking the decision to relocate to South Africa.
Launched in October last year, Zazu is a digital marketplace connecting farmers to buyers. Farmers with extra produce are able to connect with new markets, while buyers are provided with a more sophisticated and easy way to order more produce for less.
“Zazu allows both farmers and buyers to accurately track their inventory when it is in transit and of course, it has a clear invoicing and payment solution,” founder and chief executive officer (CEO) Perseus Mlambo told Disrupt Africa.
Uptake was strong in Zimbabwe, with Zazu signing up 9,000 farmers interacting through SMS on the platform, and making good money. But currency issues forced the startup to think about relocating.
“We were not necessarily forced out of Zimbabwe, but from a business model point of view we were working with SMEs who had no cash to meet their obligations,” Mlambo said.
“The preferred currency, or rather the rumoured introduction of the bond notes, just made it so unpredictable to operate in. At the end of the day, as a business working with farmers, our core purpose is to give them value and to do that, they relied on us to negotiate better for them.”
Once this became impossible, Zazu closed shop in Zimbabwe in August this year, choosing to move its operations to neighbouring South Africa. The startup raised a seed round in the same month, and is now in the process of piloting in its new market. In spite of having to move, Mlambo said there is plenty of potential for Zazu.
“The sheer number of middlemen involved in the agricultural value chain means that discovery is hard, margins have been made to support middlemen and therefore information is not allowed to flow freely,” he said.
“We are solving this issue, allowing farmers to plan better, understand future prices and have a layer of transparency that wasn’t there before. In South Africa, we have been focusing on the hospitality industry where liquidity is hard and as such, working to include trade credit for buyers.”
In fact, he said Zazu’s market is likely to be larger in South Africa, which is a hub for the fresh fruit and vegetables industry. Though relocating has not been without its challenges.
“Our target users are predominantly hard to reach and to discover. There is the issue of the language barrier of course, and the need for a slow initiation when demonstrating the tech,” Mlambo said.
“But it’s been incredible to drive in the outback, meet farmers and offer our product. The feedback has been constant, allowing us to build a better product.”
The startup has had to localise its platform in order to succeed in a different market.
“Whereas we were largely dependent on SMS for transacting with farmers in Zimbabwe, here we are finding more and more than even though data is expensive, web is still very much preferred by most farmers and it of course allows them to get a better handle of what we can achieve together,” Mlambo said.
“As a result, minor modifications are occurring to the product. Also, expect to see language translations.”
Securing a local partner in the form of the Rise space in Cape Town has helped ease the process, too.
“Being based at Barclays Rise, allows us to be part of an exciting network. Especially with the work Camilla Swart is doing around building an ecosystem of fintech startups, it has allowed us to have a soft-landing and introduction South Africa. And of course, Cape Town allows us to continue our market research because it is very connected to the rest of our current target markets,” Mlambo said.