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- Insyte Weekly: A Review of The Latest Entrepreneurship News
Insyte Weekly: A Review of The Latest Entrepreneurship News
This has been an eventful week for businesses, read the latest news and how it could affect entrepreneurs.
Tech Startup News
Google seems intrigued by the logistics sector in Africa. This week Google invested in Lori Systems, a tech-driven logistics services company that seamlessly coordinates haulage across frontier markets. The undisclosed investment is Google's third investment from its $50 million African Investment Fund following investments in SafeBoda and Carry1st. As cited in TechCrunch, "the Africa Investment Fund has an eye for startups that it has a strategic overlap in key verticals, including fintech, logistics, e-commerce and local language content." The supply-chain disruptions caused by the lockdowns arguably made Lori Systems an attractive investment opportunity. Furthermore, more than $180 billion/year is spent on haulage, and logistics account for more than 70% of a product’s price in Africa. [Source: TechCrunch]
Another sector to watch out for in the African Startup Ecosystem is Agritech. As reported by Ventureburn, the industry has many risks as farmers struggle to predict whether they will make a profit or a loss. This is the problem Zamokuhle Thwala, CEO of Agrikool, wants to solve. AgriKool is an agricultural marketplace connecting agricultural producers to buyers to facilitate the sale of products between retailers and farmers. To date, AgriKool boasts a marketplace of large and small retailers looking for fresh produce. The platform reduces costs such as transportation and fees plaguing the traditional agriculture value chain. [Source: Ventureburn]
Pick n Pay and Tiger Brands make major moves
South Africa's largest food maker, Tiger Brands, plans to install solar power at four manufacturing sites by early next year. Tiger Brands' long-term aim is to source 65% of power from renewable energy by 2030. [Source: Business Tech]
Pick n Pay launched a new supermarket brand named Pick n Pay Qualisave. The new brand is targeting SA's middle class. Reportedly, the company will consist of two brands: Pick n Pay (targeting affluent consumers) and Pick n Pay Qualisave (targeting the middle class & less wealthy consumers). As cited by Business Tech, the PnP group stated the following: "From September 2022, Pick n Pay QualiSave stores will have the new brand name and will over time be revamped to make them easily distinguishable from Pick n Pay stores" [Source: Business Tech]
What is the Impact?
News this week will be received by entrepreneurs with mixed feelings. I am optimistic about Google's Africa Investment Fund because it seems Google is open to ideas that solve African problems regardless of the sector. As stated earlier, Google's first three investments have all been in startups in different sectors. Google's goal is to invest $1 billion in "tech-led initiatives" within the next five years; this is a strong invitation for aspiring African entrepreneurs to produce innovative solutions to challenges.
I am also optimistic about the potential indirect effects Google's investments will have on the investment landscape. As a result of Google's reputation, I expect more investment funds and VCs to broaden their investment portfolios to other sectors in the startup space. Currently, fintech startups are attracting the majority of investments. However, I believe sectors such as Healthcare, agriculture and education deserve equal attention. Tiger Brands' move also presents a lucrative business opportunity for aspiring entrepreneurs and current solar panel distributors in the country. Since Eskom's service quality continues to decline, expect more companies and households to shift to renewable energy sources.
Competition in the grocery retail industry will get stronger as larger retailers fight for market share. PnP Qualisave essentially means PnP Group caters to every predominant income group in South Africa: Boxer caters to the rural segment, PnP Qualisave caters to the middle class, and PnP caters to higher income earners. I believe establishing a grocery retail store to compete with larger grocery retailers is not the best strategy for aspiring entrepreneurs because larger retailers benefit from economies of scale. Furthermore, they have proven time and time again that they have enough resources to create new brands that stifle new entrants. I believe the best strategy is to become a supplier to established retail brands. Aspiring entrepreneurs could supply technology, training, food, or human capital.
Thank you for reading our weekly news review. Please feel free to let us know what industries you would like us to cover in the future.
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