Ozow, a South African payment gateway, has raised $48 million in a Series B fundraising round to extend the country’s availability of alternative payment solutions.
The funding round was led by Chinese internet giant Tencent and included other investors like Endeavor Catalyst and Endeavor Harvest Fund.
Tencent, as the lead investor, contributed $20 million, accounting for nearly half of the total raised, with the remaining funds coming from other investors.
The company offers alternative payment methods such as QR codes, point of sale, e-commerce, e-billing, and peer-to-peer (P2P) payments across South Africa.
Thanks to the new funding, Ozow will be able to increase its product offering and drive more financial inclusion in the country.
The company is also considering strategic investments, such as mergers and acquisitions, to help it create new products and expand into other African countries like Namibia, Ghana, Nigeria, and Kenya in the next six months.
Originally known as i-pay
Ozow was founded as i-pay in 2014 by CEO Thomas Pays to promote financial inclusion through open banking. The startup would eventually rebrand to Ozow in 2019 following its Series A funding round.
According to the company, it is developing automated bank-to-bank payment solutions in South Africa for over 47 million bank account customers and more than 100 sectors.
Manual EFT processes were the popular option to carry out transactions online, but Ozow says it automates the manual EFT process and “makes it seamless for consumers to pay in three clicks.”
Ozow’s CEO, Thomas Pays
“When you looked at e-commerce, point of sale, e-billing, or P2P payment seven years ago, it was always a fragmented market. For example, if I want a point-of-sale device, I need to go to a company like Yoco. If I want to accept payments via card on my e-commerce site, I need to go to a PayU,” “What we wanted to address was a central platform that could basically provide solutions for e-commerce, point of sale, e-billing, and peer to peer payment.”Ozow’s CEO, Thomas Pays
The platform currently caters to more than 47 million bank account holders. All merchants need to have is a bank account and a “smart-enabled device” to receive payments.
Ozow currently services a wide range of clients, including leading enterprise companies, such as MTN, Vodacom, Shoprite Group, Takealot, and Uber.
Part of the company’s network also includes distributors, payment service providers, and resellers of the company’s goods. They are charged a percentage fee ranging from 1.5 to 2.5 per cent.
Ozow raised $2.5 million in Series A funding in 2019 and has seen 100% year-on-year growth in its business. It handles over $100 million in monthly transaction volume from thousands of retailers.
In terms of funding, in an interview, Ozow’s CEO, Thomas Pays, says, “It’s an honour to bring on board Tencent, Endeavor Catalyst, and Endeavor Harvest Fund. This is a validation of our role in transforming the banking industry through the development of innovative, convenient, and more inclusive payment solutions for everyone.”