The founders of Tazah Technologies, a B2B agriculture marketplace in Pakistan, came across while serving in leadership roles at Uber’s subsidiary Careem. Abrar Bajwa and Mohsin Zaka teamed up for long working hours as the rig grappled with the impact of COVID-19. Eventually, the two of them started talking about creating their own startup. When asked how they went from carpool to ag tech, Bajwa told TechCrunch that the two grew up in farming communities. “We are from central Punjab and all the families there have something to do with agriculture,” he said. “We had seen first-hand how farmers, or people who are involved in smallholder agriculture, do not find social mobility based on how things stack up against them.”
Agriculture is Pakistan’s largest sector, contributing around 24% of its gross domestic product and employing half of its workforce. according to government statistics. But complicated and fragmented supply chains lead to inflated prices, food waste and low profits for farmers – all problems that Tazah wants to solve. The startup, which launched two months ago in Lahore, announced today that it has raised a $ 2 million pre-seed round led by Global Founders Capital and Zayn Capital. Other participants included Ratio Ventures, Walled City Co, i2i Ventures, Suya Ventures, Globivest, Afropreneur Syndicate, +92 Ventures, Sunu Capital, Musha Investments, and angel investors as senior executives of ride-sharing platforms Careem and Swvl, where Bajwa previously worked. of the launch. Tazah.
Currently, there are around 300 small and medium vendors purchasing inventory through the platform and moving multiple trucks of products per day. At the moment it offers five main types of products: ginger, garlic, tomatoes, potatoes and onions. Tazah plans to expand to other vegetables and fruits, but wants to make sure it can ensure consistent supply and quality. For example, rather than simply serving as a market to connect farmers and shoppers, Tazah also produces quality displays, removing rotten produce. Then you classify them into categories for specific types of buyers.
For example, potatoes are separated into potatoes for homes, restaurants, small retailers, or to make French fries, based on what Bajwa and Zaka learned during market research. “We have spent months in the wholesale markets, we have interviewed hundreds of retailers and came to know that product standardization is necessary in Pakistan,” Bajwa said. “We get into the bottom line, because the retailers will know exactly what is in the bag.” This has resulted in a monthly retention rate of over 80%, with most customers shopping on the platform about four times a week.
“We are not just a box moving operation because in a bag of potatoes, there can be multiple rotten potatoes, so you don’t want to just buy from the farmers and then give it to the retailers. That doesn’t add much value, ”Zaka said. Tazah is currently focusing on small and medium-sized sellers who are overlooked by fast-moving grocery and consumer product inventory providers because they can’t buy in sufficient volume. He also started talking to other customer segments, including B2C marketplaces, grocery apps, and stores.
Increase farmers’ profits and reduce food waste
The founders of Tazah say that fragmented supply chains mean that around 30% to 40% of products go to waste because they perish or become damaged every time they are unloaded, stored and reloaded onto a truck. The company wants to fix that by creating a shorter and simplified logistics infrastructure. You plan to keep costs down by working with outside warehouse and truck providers rather than owning your own facilities.
“There is the traditional supply chain and we are building a parallel custom supply chain that is a more efficient supply chain,” Bajwa said. “It’s almost like reinventing the wheel to build a supply chain that ensures that products move as quickly as possible from the point of harvest to the point of retail.” This means that Tazah will make early investments while working with its warehousing and transportation markets for mid- and last-mile deliveries, establishing best practices on how to handle products.
Since Tazah needs to make early morning deliveries, it operates small logistics centers as well as warehouses to stay close to customers. Part of its new funding will be used to expand its network of logistics centers in Lahore, with the goal of being operational across the city by mid-October, before expanding into new regions.
Overharvesting also contributes to food waste, and one of Tazah’s goals is to build a data and analytics platform that helps farmers plan crops to ensure there is no oversupply in the markets they target. serving. Farmers often sell their produce at markets and sometimes form groups with other farmers. But they don’t have much information about markets and supply / demand beyond their communities. They also tend to end up in debt to intermediaries because they do not have access to working capital.
While Tazah is currently focusing on its supply chain work, it plans to eventually add financing options for farmers after conducting the research, such as going through several more procurement cycles to understand how much capital farmers need and how they can repay it. Some of the barriers they face include a lack of formal credit history or access to financial institutions that generally do not open branches in rural areas. Sometimes they borrow working capital from intermediaries in the supply chain, or loan sharks who charge interest rates above 60%, creating cycles of indebtedness.
“Funding is something that we are aggressively pursuing because it is a future game for us and we are working with farmers to find out what they are doing and how they are obtaining funding,” Zaka said.
The founders of Tazah hope to see more startups emerge to solve the problems of Pakistani farmers. “Agriculture has been a largely overlooked sector in Pakistan from a technology perspective, and I think that as more people get involved in this, they will help each other, rather than compete with each other,” Bajwa said. “We believe that as more people come in, it will be better because it will accelerate problem solving in this very difficult space.
He added, “This is such a large space in Pakistan and it is so inefficient that if we are able to make a small dent, it will lead to a social boost for hundreds or possibly thousands of farmers, it will improve the availability of fresh produce.” they result in less food tasted and reduce food price inflation. “