SOUTH AFRICA – Ozow, a South African fintech company, has raised a US$48 million Series B funding round to help it further develop its product offering and expand into new markets.

Ozow, which rebranded from i-Pay in April 2019 as it zeroed in on assisting Small and Medium Enterprises (SMEs) with payments, was launched in November 2014 by Thomas Pays, Mitchan Adams, and Lyle Eckstein, who identified a need for an efficient and secure online payment system in the local market.

The company enables millions of merchants and consumers with easy, fast, and secure alternative payment solutions, including QR codes, point of sale, e-commerce, e-billing, and peer-to-peer payments.

Ozow works with major retailers, including MTN, Vodacom, the Shoprite Group, Takealot, and Uber.

Ozow’s US$48 million Series B round is led by Tencent, and also includes Endeavor Catalyst and Endeavor Harvest Fund. 

The latest fundraising will support Ozow’s efforts to transform the banking ecosystem and create greater financial access for the underbanked. It will also assist Ozow in cementing its position as one of the leading payment providers on the continent, and help it expand into new markets.

“It’s an honor 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,” said Pays.

Since Ozow’s Series A funding round in June 2019, the company has seen 100 percent year-on-year growth.

The fintech now processes over US$100 million in transaction volumes monthly across a network of thousands of merchants.

The company continues to see increased growth in its user base, with more than 120,000 users joining the platform each month.

Pays says the Series B funding round will enable the company’s growth plans and regional expansion in Africa.

“We’re also heavily focused on expanding our product offering. This will largely be driven through the development of new products, as well as a strong focus on strategic investments that include mergers and acquisitions,” he said.

The platform, which caters to more than 47 million bank account holders, typically works this way.

First, consumers select Ozow as a payment option when shopping online or in-store.

Unlike other African countries, South Africa also has a functioning credit system with the prevalent use of credit cards. 

However, expensive value-added services like credit cards do not necessarily address the needs of underbanked people.

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