Yadgar Merani is the CEO of one of Iraq's hottest tech start-ups. Yadgar, who ran a booth to court investors at the USAID-funded Ninewa Investment Forum in addition to participating in a panel discussion about Iraq's newest generation of start-up entrepreneurs, is enthusiastic about the future of Iraq's tech industry and his company's potential to stimulate the Iraqi economy and become one of the country's biggest job creators.
Lezzoo, an online delivery service app for food, groceries, and other daily essentials, has expanded into four cities and grown from 3 to 160 employees in only 20 months. Yadgar Merani insists that he and his co-founders are just getting started.He sat with Rudaw English for an interview about Lezzoo's origins, the company's economic vision and their aspirations to expand at the domestic and international level.
Can you tell me a little bit about how Lezzoo came to be?
I am a co-founder of Lezzoo. We are three co-founders. I grew up in Erbil, then I moved to London to finish my studies. As I was in London, I saw all these great new services such as Deliveroo, you have Uber Eats, you have Hungry House. I thought, "this is great – I wish we had this back home as well." That's when the idea got into my head, and I couldn't wait to finish my studies to come back to Erbil and start Lezzoo.
Did you meet your co-founders in London, or did you meet back here in Erbil?
So one of our co-founders, the technical co-founder, is from Erbil. We went to school together in Ishk - Ishk high school. The other one is Alaa, and we've been friends together for almost six years now. I contacted them and told them, "guys, there's something I'm working on – would you like to get on board?" They were happy, so I came back and we started.
So Lezzoo started in Erbil. Are you still only in Kurdistan Region, or are you elsewhere in Iraq?
No, we're only in the Kurdistan Region at the moment. We're working in expanding into Baghdad, and into Mosul, hopefully. With the current developments we have not been able to go to Baghdad – we were meant to launch there in September.
Are you in Sulaimani and Dohuk as well?
Yes – Zakho, Sulaimani, Dohuk and Erbil.
How long has it taken you to expand into these cities?
So Lezzoo is 20 months old, so we're not even two years. We first started with Erbil and Dohuk together on a very small scale, but now I can say that we are the one-stop app for someone who needs groceries, or pharmaceuticals.
Oh, so you do, besides food delivery, other services as well.
Of course. We do laundry, we do groceries, we do a fresh market, pharmaceuticals, water, gas. You can get pretty much all the essentials from Lezzoo.
Would you describe Lezzoo as a Kurdish company?
Iraqi Kurdish – we're an Iraqi Kurdish company.
Do you see food delivery as the main money-maker, or do you see exciting growth in some of these other areas, like maybe grocery delivery?
I see food and groceries as being the two essential services, but Lezzoo will not only be a delivery app for food and groceries. Lezzoo will be a delivery app if you have a package at home, a letter, or any goods you want to send to a customer.
Because this is the Ninewa Investment Forum, how crucial is Nineveh or Mosul to your overall growth trajectory? Do you see Mosul as key to your continued growth?
Given that Mosul is the second largest city in Iraq, and with the [population] density within Mosul, we believe that Lezzoo can actually be a significant add-on for Mosul's, let's say, weak infrastructure at the moment, especially post-ISIS. We believe that with our expertise and the insight we have built here, we can make a huge contribution. With our rapid growth, how we've gone from 3 to 160 employees in the course of 20 months, we believe that in Mosul only we're going to have minimum 50 employees in the first year.
How do you see Lezzoo as a job creator? Who are you hiring? In what areas are you hiring?
The incredible thing about Lezzoo is that we need everybody. We need people who are marketers, we need people who are engineers, we need people who are logisticians. We need people who are monitors. Lezzoo has multiple departments– we don't just have drivers and us as the head of the company. Lezzoo has multiple departments and we literally need everyone. That's why Lezzoo currently has a very diverse team of people from Ninewa, from Baghdad, from Basra, from Dohuk, Zakho Sulaimani and Erbil. I mean in this diverse fashion, we can actually be the prime example of what a company or a start-up should look like in Iraq if they're aiming for growth and actual establishment.
You talk about Lezzoo's relationship with companies – the mutual benefit of the partnership for business and Lezzoo? How are you stimulating the economy in that way?
Okay, so, what we're doing is, we are generating sales for our partners – I would say that each restaurant, each partner with us is currently [making] at least four million dinars in revenue on a monthly basis – that's average. We charge the merchants commission, and we have a delivery charge on the customer. This way, we're actually providing a very convenient service for the customer, and at the same time we're increasing sales for our merchants. Any merchant in the Kurdistan region that comes on board with Lezzoo will earn – minimum – four million additional dinars on their monthly revenue.
You guarantee that increase – you pay them to join?
Almost a guarantee. No – that's the average sales increase for each and every merchant that comes on board with us.
If a company decides they no longer want to be included in Lezzoo, or vice-versa, can Lezzoo decide to terminate a relationship with a company that's not generating sales?
Lezzoo will not terminate any company for not generating sales. In fact, Lezzoo always encourages and finds new methods of making sure that these merchants are maintaining their sales. But what Lezzoo will not maintain is merchants who are not following a standard for their packaging or hygienic methods of making food.
Do you have a new timeline for expansion into Baghdad and Mosul, or is that still indefinite?
We're hoping – I mean still there's a lot of uncertainty – but we're hoping by New Year's, after the new year we should be in Baghdad.
So Mosul presumably sometime after that?
The thing is we can't be in Mosul unless we register in Baghdad. We can't be anywhere in Iraq unless we register in Baghdad. Otherwise we would have expanded into Mosul last year. The issue is that the central government has this imposed on all businesses in the Kurdistan Region – if they register in the Kurdistan registry office, that does not necessarily mean they have registered with the central government. So we have to go to Baghdad and register in Baghdad before we can expand anywhere else.
Do you have international ambitions beyond Iraq? Do you see a market for Lezzoo in any other countries in particular?
Absolutely, absolutely. We are hoping to expand to Lebanon. And then from Lebanon, we are hoping to expand to Amman, Jordan. After that, we are thinking of expanding to northern Africa – Algeria and Morocco. Given that it has similar competitive landscapes, and similar market size, and with the same logistical difficulties, we believe that we can be the right team since we managed to solve a major problem within an infrastructure such as Iraq's. We believe that we can do the same in the countries we aim to expand to.
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