OZÉ, a Ghana-based fintech startup that focuses on scaling small African businesses through digitized operations and affordable capital has closed a $700,000 seed round from Anorak Ventures, Matuca Sarl, Rising Tide Africa, and existing investors Ingressive Capital and MEST.
Founded in 2017, OZÉ leverages users' data to build credit profiles that will help them access no-collateral loans from banks. They will leverage the seed round to grow its team, expand to Nigeria, and promote the iOS version of its app.
MSMEs contributes 38% of sub-Saharan Africa's GDP but up to 51% of them lack the necessary finance to grow. According to the International Finance Corporation, the MSME credit gap in Sub-Saharan Africa stands at $331 billion.
There are so many factors behind this gap. Some of them being that some MSMEs do not have proper business model, collateral, no credit history, or lack formal business education. OZÉ is looking to bridge this gap by leveraging its business app and proprietary credit risk algorithm to make it seamless for banks to offer no-collateral loans to MSMEs.
“The OZÉ Flywheel makes profitable lending to MSMEs possible for banks,” says Co-founder & CEO, Meghan McCormick. “Using OZÉ already screens for the type of entrepreneurs banks should want to lend to and as entrepreneurs keep using OZÉ they can access more funds at a lower risk to the bank.”
“I couldn’t be more excited about what’s next for OZÉ,” says Co-founder & COO, Dave Emnett. “We’re integrating with Paystack and other PSPs to allow our SMEs to accept and send payments through the app and partnering with more financial institutions to expand on the success of OZÉ’s approach to lending.”
The OZÉ Business App makes it seamless and interesting for MSMEs to keep their financial records. With just the tap of their smartphone, users can track sales and expenses, send digital receipts and invoices, remind customers to pay what they owe. Users can monitor their business through the dashboard and should there be any issue, a business coach is just a click away.
Since its launch, the startup has recorded a decent number of active users and paying subscribers. With a record of over 250,000 transactions, OZÉ’s value stands at over $50 million. In 2020, the startup piloted a small loan portfolio with no defaults and a projected annual 43% ROI.