Zazu, a digital financial operating system for African small and medium-sized enterprises (SMEs), has successfully closed a $1 million pre-seed funding round. The investment, supported by notable firms like Plug and Play Ventures, will accelerate its launch in South Africa and Morocco. This strategic funding sets the stage for the company's planned pan-African expansion in 2026, aiming to address the financial needs of underserved businesses.
Addressing Africa's 'Missing Middle'
Africa's economy is hampered by a phenomenon known as the “missing middle,” where small and medium-sized enterprises are critically underserved. These 50 million businesses, vital to the continent's GDP, face an estimated funding gap of over $330 billion. This lack of accessible financial services creates significant administrative and growth barriers for modern entrepreneurs, who are often overlooked by traditional institutions.
Co-founder Rinse Jacobs notes that traditional banks employ archaic metrics when dealing with SMEs, creating a disconnect. He highlights a significant mismatch between the modern digital tools businesses use and the outdated systems offered by their banking partners. Zazu aims to bridge this gap by providing a financial environment tailored to contemporary business operations and workflows.
A Rebundled Financial Operating System
Zazu is positioning itself as a rebundled financial operating system, a departure from the fragmented fintech market. Instead of forcing SMEs to juggle multiple standalone apps for services like payroll and invoicing, the platform acts as a central hub. It integrates these functions into a single, cohesive dashboard for streamlined financial management and greater operational efficiency.
The platform's core offering includes business accounts, cards, and transfers, enhanced by API-driven integrations with key finance tools. Business owners can create sub-accounts with specific roles and spending limits, instantly issuing virtual or physical cards for employees. A key feature is its digital incorporation flow, which helps informal businesses formalize their operations and access the banking system.
Zazu provides powerful insights into a business's financial health, including cash flow trends and runway projections. The system functions as an automated financial assistant, sending reminders for unpaid invoices and upcoming liabilities. Users can also configure automated rules, such as setting aside a percentage of incoming revenue for future capital expenditures.
Strategic Partnerships and Revenue Model
Rather than pursuing its own banking licenses, Zazu operates on a partnership-first model to ensure regulatory compliance and speed to market. It collaborates with regulated commercial banks in each country, allowing the startup to focus on user experience and third-party integrations. In Morocco, for instance, it partners with Chari, an API-driven banking platform operating under a payment license.
The company employs a multi-faceted revenue strategy, starting with tiered monthly subscription fees for its platform bundle. It also generates network revenue through card interchange fees and interest earned on deposits. Additionally, Zazu earns commissions from its marketplace when customers use services from third-party partners like lenders and insurers.
Early Traction and Future Ambitions
Zazu has already demonstrated significant early traction, with over 1,000 SMEs on its waitlist in South Africa and Morocco. The platform is currently in beta testing with more than 50 businesses and has gained recognition through its selection into the Visa Accelerator Program. It has also established integrations with over 20 ecosystem partners, including Paystack and Ozow.
With its pre-seed capital secured, Zazu is focused on capitalizing on this early momentum and establishing a strong market presence. The funds will support its immediate rollout and customer acquisition efforts in its initial target countries. The company plans to open its seed funding round in early 2026 to finance a broader pan-African expansion and introduce new products.
Zazu's $1 million pre-seed funding marks a significant step toward solving a critical challenge for Africa's economic backbone. By providing a unified and modern financial operating system, the startup is poised to empower millions of SMEs. Its strategic, partnership-driven approach could redefine business banking across the continent, fostering greater growth and economic formalization.