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South Africa’s Zulzi raises $1.6 million to Expand Operations

Zulzi, a South Africa based on-demand delivery platform has bagged R30 million ($1.6 million) funding from an unnamed JSE-listed company, aimed to expand its operations.

Founded in 2013, Zulzi launched its operation in 2016 in Johannesburg as an e-commerce business focused on students second hand books.

After strong initial demand, it has grown into an on-demand delivery platform encompassing food and grocery delivery to clients via its mobile app and web app which features retailers such as Woolworths, Pick n Pay and Spar using its mobile app.

It has grown its foothold outside of Johannesburg, and is now also active in Pretoria, Durban and Cape Town.

Already processing over 2,000 orders a day, Zulzi is looking to widen its offering in the near future. The funds will enable the startup to grow its technology, marketing, and operations teams.

“The reason why we are so excited is because the opportunity ahead of us is enormous. South Africa is a R1 trillion ($54 billion) grocery market and less than one per cent of that is bought online,” said Chief Executive Officer Donald Valoyi.

“It’s an enormous category that’s highly under-penetrated online. The reason why e-commerce is very small in South Africa is primarily because groceries were not online and Zulzi wants to fast track the growth of online grocery delivery,” he added.

The startup charges a service fee that ranges from 0% to 12.5%, depending on who the retailer is. In addition, a flat fee of R45 (US$2.44) is levied on deliveries. Deliveries are limited to within a 6km radius of the nearest grocery retailer.

In 2017 Zulzi netted a R2million ($108,000) investment from IDF Capital of which last year the start-up bought back part of the stake held by the fund in the company.

Revenue in the eCommerce market in South Africa amounts to $3.706 billion in 2020. It is expected to show an annual growth rate (CAGR 2020-2024) of 10.3%, resulting in a market volume of US$5.482 billion by 2024, according to Statista.

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