Tazah Technologies is a B2B agricultural marketplace in Pakistan founded by Mohsin Zaka and Abrar Bajwa. They met while working as leaders at Uber's Careem subsidiary. As the platform dealt with the impact of COVID-19s, Abrar Bajwa bonded with Mohsin Zaka. They began to talk about starting their own startup. Bajwa explained to TechCrunch how they went from ride-hailing into agritech. He said that they grew up in rural communities. He said that they are both from central Punjab, and every family in the area has some connection to agriculture. We witnessed firsthand the inequalities faced by small-holder farmers and those who work in agriculture.
According to statistics, agriculture is Pakistan's largest sector. It contributes about 24% to its gross domestic product, and employs half of its labor force. Tazah is determined to fix the problems caused by fragmented supply chains, which can lead to high prices, food waste, and low profits for farmers. Two months ago, the startup was launched in Lahore. Today, it announced that it raised a pre-seed round of $2 million led by Global Founders Capital. Walled City Co and Ratio Ventures were also involved. Globivest and Afropreneur Syndicate were also included. Sunu Capital and Musha Investments were angel investors. These include senior executives from Ride-Hailing Platforms Careem, Swvl and Sunu Capital. Bajwa was previously employed by Swvl before launching Tazah.
The platform currently has 300 small- and medium-sized sellers who buy inventory. It also moves many truckloads of produce every day. It currently offers five main types of products: tomatoes, onions, ginger, garlic and tomatoes. Tazah hopes to expand its offerings to other fruits and vegetables, but it wants to be able to guarantee consistency and quality. Tazah screens produce for quality and removes rotten products, so it is more than just a marketplace that connects farmers and buyers. It then sorts them into specific categories to suit the needs of particular buyers.
Bajwa, Zaka and others learned from market research that potatoes can be divided into different sizes for small retailers, households, and restaurants. Bajwa said that they spent many months in Pakistani wholesale markets and interviewed hundreds of sellers to find out the need for standardization. Because retailers know exactly what is inside the bag, we get to the bottom of the operations. Customers buy on the platform approximately four times per week.
We are not just a moving company. In one sack of potatoes there could be many rotten potatoes. So you don't want to buy directly from the farmers and give them to retailers. Zaka said that this doesn't add much value. Tazah's current focus is on small- to medium-sized sellers, who are often overlooked by fast-moving grocery product inventories and consumer goods suppliers because they can't buy in sufficient quantities. Tazah has also begun to talk with other customer segments, such as B2C marketplaces and grocery apps.
Increasing farmer profits and decreasing food waste
Tazahs founders claim that fragmented supply chains cause 30% to 40% of produce to be wasted. Produces can perish or become damaged every time they are unloaded and loaded onto trucks. Tazahs wants to change that. It plans to create a simpler, faster logistics infrastructure. The company plans to reduce costs by using third-party trucking and warehouse providers rather than owning its facilities.
Bajwa said that there is a traditional supply chain. We are building a parallel customized supply network that is more efficient. It's almost like reinventing a wheel to create a supply chain that moves products as quickly as possible from point-of-harvest to point-of-retail.
Tazah has to deliver early in the morning so it runs small fulfillment centers and warehouses in order to be close to its customers. It will use part of the new funding to expand its fulfillment centers in Lahore. The goal is to be operational in the entire city by October middle, and then expand into other regions.
Over-harvesting is also a contributor to food waste. Tazahs goal is to create a data and analysis platform that will assist farmers in planning their crops and making sure that there is not an oversupply on the markets they sell. Farmers sell their produce at farmers markets. Sometimes, they form groups with other farmers. They don't have much information about markets and demand beyond their locality. Because they don't have access to working capital, they often fall in debt to middlemen.
Tazah's current focus is on its supply chain work. However, the company plans to add financing options to farmers after conducting research such as going through more procurement cycles to determine how much capital farmers require and how they can repay it. They face many obstacles, including a lack of credit history or limited access to financial institutions in rural areas. They borrow working capital from intermediaries in supply chains or loan sharks, who charge higher than 60% interest, creating cycles that lead to indebtedness.
We are actively looking at financing because it is a future play. Zaka said that we are working with farmers in order to find out what they are doing and how they get financing.
Tazahs founders want to see more startups to solve the problems of Pakistan's farmers. Bajwa said that agriculture has been an under-resourced sector in Pakistan. He believes that more people will come to this field to solve problems for farmers. It will help to solve this difficult problem faster if there are more people.
He said, "This is such a huge space in Pakistan, and it's so inefficient that even a small amount of work can make a big difference. It will lead to social uplift for hundreds of farmers or possibly thousands, improve the availability and taste of fresh produce, and lower food inflation."