OZEa Ghanaian fintech start-up that provides digital record-keeping tools with integrated financial products to small and medium enterprises, raised a $3m pre-Series A round.
The new round of the startup was led by European venture capitalist Speedinvest, with participation from Cathay AfricInvest Innovation Fund, Savannah Capital and other anonymous angel investors. This news follows $700,000 seed funding OZÉ got last year.
Over the past 18 months, several startups serving small and medium-sized businesses with credit, accounting tools, and an operating system to manage their operations increased immensely. A few of them include Kippa, Bumpa and Sabi Cash.
But OZÉ was launched a while ago before the space got hot due to new investor interest in African startups.. CEO Meghan McCormick and COO Dave Emnett founded the company in 2018 following a series of trips McCormick took across Africa, where she noticed the challenges faced by small businesses. businesses and their urgent need for financial and record-keeping tools to thrive.
“Working like this closely with small business owners, I understood the issues they were facing. And after seeing how small businesses in the United States operated in their childhood, and seeing the tech stack or the service stack that SMBs have there, I had a good understanding of the solution set,” said McCormick said on a call with TechCrunch.
“And by bringing those two elements together, we were able to create a platform suited to today’s realities. But also really pushing towards what is possible for business owners in Ghana and Nigeria, who have a smartphone in their pocket.
OZÉ boasts of having a customer base of over 125,000 business owners in Ghana and Nigeria. This number is correct a drop in the ocean of over 100 million small businesses across West Africa which, according to OZÉ, is its addressable market. Traditionally these businesses operated like brick-and-mortar businesses operating with pen and paper. Today, as they seek to establish online presences, the demand for technology and financial products to digitize businesses is increasing.
OZÉ’s business application helps these small and medium-sized businesses gather data on sales, expenses, debts, receivables and customers. Those data is analyzed to provide businesses with support ranging from personalized recommendations, reports to daily business advice, monthly business seminars and access to an on-demand business coach.
Based on how companies use the platform, OZÉ generates performance and behavioral data, which it uses to predict their credit risks and create alternative credit scores. The startup partners with financial institutions (banks and fintechs) to lend to companies in need.
“OZÉ’s methods and relationships with business owners mean loans made through the platform can be unsecured, larger, and repaid over a longer period without increasing risk,” the company said in a statement. .
On the call, McCormick said the credit was principally provided to customers who have been active on the OZÉ application for at least 30 days. The stronger the behavioral component and credit rating of the business, the longer that business will last, she said. Additionally, companies on the platform take out an average loan of $5,000 while paying up to 36% APR.
Similar platforms provide credit and record keeping services, but McCormick is quick to point out what sets his company apart. “I think the close integration between record keeping, credit and now payments is a real competitive factor in terms of the business model that we can execute. And that triggers a flywheel in the manner correct be an archivist and a business or correct being a digital lender wouldn’t be,” said the chief executive..
“Most small businesses know they should keep records. But keeping records, digital or not, is a change in behavior. And so, we’ve built a solid foundation of behavioral science into our app so that OZÉ becomes habit-forming.
The positioning of OZÉ as a coach, partner and advisor to businesses on its platform ensures that they have access to a community of other entrepreneurs, to learn, grow and trade together. The platform is trying to take on this idea of making accounting social, she said.
On the credit side, OZÉ can leverage cash-based business performance data and offer better loans after gaining psychological insight from automatically recorded transactions.
The Ghanaian fintech recently launched a payments integration to enable its businesses to collect payments on the platform. In Ghana, businesses can accept payments by mobile money or by card and by bank transfer or by card in Nigeria. According to the company, businesses that use OZÉ as a payment choice instead of using other platforms or cash will have higher credit limits and lower interest rates.
Last year, monthly active users of OZÉ increased by 1,200%. The company said the number of loans granted on the platform also increased by 200% from the third to fourth quarters of 2021. OZE also claims that 97% of business owners using the platform are running growing businesses, profitable businesses, or both..
Regarding the company’s next steps after its recent funding, McCormick said OZÉ will strengthen its team, acquire more customers, strengthen its presence in Ghana and Nigeria and begin expansion plans into new African markets.