According to the World Economic Forum, small and growing businesses in Africa create around 80% of the region’s employment. They are also responsible for establishing a new middle class and fueling demand for new goods and services. Despite their significance, they are still plagued with challenges.
But, recently, the number of startups tapping into these SMEs has risen. These provide services ranging from tools for tracking sales and stock to credit. Zambia’s Z’POS - a product of Outsource Now - is joining that club.
Founded in early 2017, Z’POS has the aim of enabling businesses in Zambia to manage their sales. The startup’s focus is small and medium-sized retail shops in all retail sectors. Think FMCGs, auto-spare shops, boutiques and the like.
A graduate of the Tony Elumelu Entrepreneurship Program, Z'POS is the “the first company in Zambia that is working to organize Zambia's informal retail data.”
“Before Z'POS, most micro merchants either wrote in sales books or never recorded them at all,” Chisepo Chirwa, co-founder and CEO, says. “A few others used cash registers or those that could afford bought point of sale (POS) software that they had installed for them on PCs.”
Apart from POS software re-sellers and cash register suppliers, Chisepo struggles to identify other local competitors. But this changes when you change to the continental scope.
The most notable one of them is YOCO from South Africa - which closed a $16 million Series A in a round led by Partech Ventures. Another one is Uganda-based Swipe2pay that closed $40,000 from Rwanda-based Leapfrog Ventures.
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Z’POS, too, has raised at least $57,500 in funding in both equity and grants. The startup scored $7,500 in grant funding from the Tony Elumelu Foundation ($5k) and Insight to Impact ($2.5k). It also attracted an extra $50,000 in equity investment in June this year from Zenga Ventures and Ground Squirrel Ventures.
Chisepo says that this has propelled them to a couple of merchants. “We have tested the Z'POS concept for over a year with over 70 merchants now signed up,” he said.
Currently, they are carrying out a beta test of their Android app with a limited number of 5 merchants. Though, they are getting ready for a roll-out to 200 merchants (first) and then 5000.
“We will roll-out to 200 merchants by April 2019 and then use foot-soldiers to reach 5k merchants by end of 2019,” Chisepo noted, “we expect to expand onwards thereafter.”
The startup currently charges an undisclosed annual license fee for users on the Z'POS platform. Though, at the same time, they are planning to explore a freemium model where users will pay for using the advanced version of Z'POS. "We expect to charge merchants an average of $9 per month to use Z'POS," he said.
Additionally, Chisepo says that they are looking to explore partnerships with Financial Services Providers. The two will then split the difference. “We will also partner with FSPs that will offer loans on the platform to deserving merchants. We expect to share revenue with the FSPs.”
The startup's team consists of 6 with the founders - Vernon Ushibantu (CFO) and Mukopaje Singogo (CTO).