🎙 F-Squared Podcast #9 - Building an SME Neobank for Africa with Zazu CEO Rinse Jacobs

Why the future of SME banking isn't a better account, but a unified financial platform.

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Why I Wanted to Have This Conversation

There is a fundamental mismatch between how modern small businesses operate and how traditional banks are built to serve them. The rise of the platform economy, freelancers, and digital-first SMEs has created a massive, underserved market. While headlines often focus on consumer neobanks or payment gateways, I wanted to understand how the core financial operating system for these new businesses is being built in Africa and if there’s any logic in thinking about an operating system.

So I spoke to Rinse Jacobs, CEO of Zazu, a South Africa-based neobank building a comprehensive financial platform for SMEs. Instead of launching with a single "wedge" product, Zazu has chosen a platform-first strategy from day one, aiming to "rebundle" best-in-class services into a single, cohesive hub. They are building for the tech-savvy entrepreneur who uses Slack and Notion and expects their bank to be just as smart. Whilst this type of business may be more prevalent in South Africa given higher disposable incomes, there’s a growing trend of tech savvy solo-preneurs in the continent. From global knowledge workers, remote software developers and people running small businesses like cafes.

This conversation unpacks the real-world challenges of building for this segment: moving beyond a simple account and card to create genuine financial workflows. We cover their Banking-as-a-Service (BaaS) architecture, the "jobs to be done" that SMEs actually face like incorporation, bookkeeping, and expense management; and why a transparent subscription model is critical for building trust. This is not a story about displacing banks with a cheaper product. It’s a grounded discussion on building a true financial partner for the modern African business.

PS - I first spoke with Rinse and Germain about three years ago when Zazu was still a concept. It’s fantastic to see their progress and have them back to discuss their journey from research to a live product.

In This Episode, You Will Hear

• How walking into small shops in South Africa revealed the "horror stories" of SME banking;

• Why traditional banks seem to fail SMEs through poor service, opaque fees, and one-size-fits-all products;

• Zazu’s strategy to "rebundle" financial services, creating a hub instead of just another single-purpose app;

• The logic behind using a Banking-as-a-Service (BaaS) partner to focus on customer experience and speed. Whilst there are complications, it’s the most logical jump-off point for an SME Neobank;

• How they are building a "Stripe Atlas for Africa" by integrating digital incorporation with banking and bookkeeping;

• Why a transparent, SaaS-like subscription model builds more trust than a complex web of hidden fees and why it’s important to charge customers from day one. No free-rider problem;

• Why Zazu measures business complexity by the number of employees (FTEs), not just by revenue;

• The vision for using AI as a "financial co-pilot" to help founders understand their business health in simple terms.

Key quote:

"That customer then said, 'But actually guys, are you saying that I can build out my whole business on top of Zazu and manage it from there?' We were like, 'Well, actually, why not?' Then we started to think about this a bit more and said, 'Why don't we build this out a bit more broadly and really make sure that all of these streams are captured instead of just the neobank side of things?'"

🔑 Key Lessons for Fintech Builders

Technology and Infrastructure

• An account and card are table stakes; true value and defensibility lie in the financial workflows built on top.

• BaaS partnerships can accelerate time-to-market and allow you to focus capital and talent on the customer experience layer, which is the key differentiator. However you have to handle the downsides of reliability and compliance overhead. A key insight is that the c-suite of tier 2 and 3 banks see the value in BaaS and are committed to make it work.

• A marketplace model for third-party services (like lending or payroll) allows you to serve diverse customer needs without taking on the direct complexity and risk.

Regulation and Compliance

• Partnering with a licensed bank offloads the initial regulatory burden but requires diligent management of the partner relationship and their compliance overhead.

• Solving tax complexity and simplifying bookkeeping for SMEs is a powerful, sticky feature that drives long-term retention.

• Integrating digital business incorporation into your onboarding flow solves a major customer pain point and creates a loyal, fully KYC'd customer from day zero.

Product and Commercial Strategy

• The next wave in fintech is not "unbundling," but intelligently "rebundling" best-in-class services into a single, seamless user interface.

• A transparent SaaS subscription model can be a powerful competitive advantage against incumbents who rely on opaque, transaction-based hidden fees.

• Define your ideal customer profile by their operational needs (e.g., number of FTEs, workflows) rather than blunt metrics like revenue, which may not reflect their actual problems.

🧠 Strategic Takeaways

For Operators

Focus on solving the entire "job to be done" for your customer. For an SME, this isn't just "banking"; it's "managing the financial side of my business." The integrated platform that solves the whole workflow will win against single-point solutions.

For Investors

Look beyond payment volumes and customer numbers. The convergence of SaaS and fintech is creating a new, more resilient business model. Companies that can orchestrate a valuable ecosystem of services will build deeper moats than those competing on price alone.

For Policymakers

The primary barrier to SME formalization may not be unwillingness, but complexity. Enabling seamless digital pathways between incorporation, tax registration, and financial services can significantly boost formal economic participation and provide a richer data set for economic planning.

🧾 If You Are Interested In

• How to build a digital bank that goes beyond basic accounts.

• Why the "platform and rebundling" model is the future for SME fintech.

• The operational pros and cons of a Banking-as-a-Service (BaaS) strategy.

• How technology can help solve the SME formalization gap in Africa.

→ this episode is worth your time.

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Transcript

Samora Kariuki: In this episode of the Fqu podcast, I speak with Rinse Jacobs, the CEO of Zazu, an SME-focused neobank based in South Africa that's gearing up for its public launch this August. Zazu isn't just building a digital bank; they're building financial workflows designed specifically for small businesses. We explore their journey from concept to execution, their banking as a service architecture, and how they've approached product development in a way that prioritizes real SME pain points. Rinse also shares their perspective on the evolving South African fintech landscape and what it takes to build a scalable platform in a market that's still underserved yet full of potential. I think we spoke three years back, and you guys were still doing your research, still trying to figure things out.

Samora Kariuki: Now you're in Cape Town. I think you've made significant progress. Before you tell us more about the journey, maybe walk us through what you felt at the time was the problem specifically that SMEs are facing, the specific SMEs that you're trying to target, and why that problem persists. I think you released a report the other day with Whitesight – great report, by the way – and it seems like a global problem, but I'd want to hear it more from your perspective, the South African perspective, and why that specific SME problem persists in South Africa.

Rinse Jacobs: Indeed. We did quite a bit of research because it's not unknown that globally there's a mismatch between what banks have been offering traditionally and what SMEs actually need. We said to ourselves, instead of just assuming we know what it looks like coming from the European market, let us go to different places and talk with SMEs to see what they are all about, what tools they are using, and what kinds of stories they have to tell when they are talking about banking. Unfortunately for South African banks, no good story was being told; everybody was talking about how they had some kind of horror story that was haunting them. That was literally us walking on the shopping streets and knocking on the doors of boutiques and random small stores, sitting in co-working spaces and talking around the coffee machine with different founders, just having an open conversation on what is it that you are missing. Also, then opening up our own SME banking accounts in various of the banks in South Africa, it leaves a lot to the imagination.

Samora Kariuki: You were saying that you walked across the streets of South Africa, in co-working spaces, everyone was just complaining about their SME experience, at least what banks were offering. I was just digging into what was it specifically? Was it just a kind of mismatch between the way an SME operates now versus how banks are set up from an SME perspective? Was it a credit issue, that you're not accessing credit? Was it just the payments or was it just a combination of all those factors?

Rinse Jacobs: I think it's threefold. The three main arguments that we heard were: customer service is not where it should be – you are the one who has to follow up and change over different channels with the bank. It is the opaque fees, not knowing what you end up paying at the end of the month. If you start to do some digging and open up that fee book of a bank, first of all, they have a fee book of six, seven, eight pages, and you will never really understand what it is, what you're paying when. But most importantly, it is that especially the traditional banks have a very one-size-fits-all proposition which obviously doesn't meet the very particular pain points that you see in different micro-segments. A graphic designer has a very different pain point around banking than maybe a taxi driver or a plumber may have. So, just by solving that through one product or one proposition, you are not doing yourself a favor in capturing all the pain points that you otherwise can. That's what you really see being the big mismatch between SMEs and their banks.