SA Grocery Delivery Startup Zulzi Raises R30m from JSE-listed Company

• Johannesburg based online grocery delivery startup Zulzi has secured R30-million in funding from a JSE-listed company.
• Zulzi currently serves Pretoria, Johannesburg, Cape Town and Durban.
• The startup processes about 2000 orders a day (70 per cent of them in Gauteng) and it did R1-million in sales a day in March, up six times in 2019 over the same period.

Johannesburg based online grocery delivery startup Zulzi has raised R30-million in funding from a JSE-listed company.

The startup, which was created by Vutlharhi Valoyi in 2013 and launched in 2016, allows members to access thousands of grocery items directly via a mobile app via its platform.

Following the launch of the Zulzi platform, Netshipise joined as co-founder CTO. Similar to startups like OneCart based in Cape Town, the app enables consumers to create their lists of groceries and buy products without ever visiting a shop. Trained shoppers then handpick and deliver the items, transforming the shopping experience in grocery stores.Zulzi was founded by Vutlharhi Valoyi and Michael Netshipise

Valoyi, who made the statement on Twitter last week, confirmed the investment today.

He would not, however, name who the investor is, other than to state that it is a listed company and the investment was completed in March, just before the Covid-19 lockdown in South Africa began on March 27. Last week, he said, the money just landed in the startup ‘s account.

He disclosed that discussions with the investor started in December, adding that a number of investors had already approached the startup. But he said the startup went with the company listed, because “the interest was always there.”

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Although he wouldn’t say who the investor is, Valoyi revealed that the company was behind the creation of Checkers’ Sixty60 app. He said that the creation work that was done last year helped put cash into the business as the business expanded. Valoyi says that since its launch, the startup’s app has now been downloaded 100 000 times.

The startup currently serves Pretoria, Johannesburg, Cape Town and Durban. The company he says is now processing about 2000 orders a day (70 percent of them in Gauteng) and that it did R1-million in sales a day in March, up six times in 2019 over the same period.

About 99% of the startup’s orders are concluded via the mobile app, and just 1% are made on the web app, said Valoyi.

Today the business has a team of 35, including eight developers. In 2017, the startup had previously netted an R1-million investment from IDF Capital and Valoyi said last year the startup bought out the stake from IDF Capital.

Valoyi, who originally comes from Giyani in the province of Limpopo, says it all began after he started working at a bank.

He started selling second-hand books. Things to make some extra money so he turned it into a company and started selling computer equipment as well. He then added other items, including food delivery and grocery stores.

Netshipise, Valoyi’s former colleague at FNB where the two had previously worked, closed his analytics business and joined Valoyi when he launched the platform.

In its first year, the business turned R5-million in revenues. “That encouraged me, that this online thing can work,” Valoyi now recalls.

Due to the high competition he faced from more developed players in 2017 he dropped food delivery and pivoted the company to focus solely on doing grocery delivery. But he soon found that grocery delivery has unique problems that other forms of deliveries don’t.

Often products can go out of stock without warning. To get around this, he introduced a real-time messaging system to the app so shopper assistants working for the company could connect with a customer directly.

Zulzi has a service fee ranging from 0 to 12.5 per cent, depending on the seller. Furthermore, a flat R45 fee is charged on deliveries. Deliveries are restricted to the closest supermarket store within a 6 km radius. For Valoyi and Netshipise, it has to feel like a dream come true, testimony to the fact that possibilities exist even in times like these.