Ozow, a South African payment gateway, has raised $48 million in a Series B fundraising round to expand the country’s alternative payment options.
The funding round was led by Tencent, Chinese internet giant, and included other investors like Endeavor Catalyst and Endeavor Harvest Fund.
As the lead investor, Tencent contributed $20 million, accounting for nearly half of the total funds raised, with the remaining 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.
Ozow will be able to increase its product offering and drive more financial inclusion in the country as a result of the funding.
The company is considering strategic investments like mergers and acquisitions to help it develop new products and expand into additional African nations such as Namibia, Ghana, Nigeria, and Kenya in the next six months.
Ozow’s business has grown 100 percent year over year since the company raised $2.5 million in its Series A round in 2019. Ozow raised $1.2 million in angel and seed rounds in 2016 and 2017, bringing its total raise to $3.7 million from investors such as Kalon Ventures. This Series round, however, has increased that figure to $51.7 million.
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. All merchants need to have is a bank account and a “smart-enabled device” to receive payments.
Ozow currently offers its services to 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 percent.
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 confirms our position in revolutionizing the financial industry by developing more innovative, convenient, and inclusive payment alternatives for everyone.”