• Papama Nyati

Raising $700k in Seed funding: One-on-one with OZÉ’s Meghan McCormick


OZÉ CEO, Meghan McCormick (Middle) accepting an award at AfricArena 2020 Summit.

Small businesses rarely grow, particularly in Africa. This is the mammoth challenge that Meghan McCormick is missioned to tackle through her Ghana-based company, OZÉ. Upon further investigation into the problem, while working with small businesses in Benin and Guinea, Meghan realized that one of the blockers of growth was that records were being kept on paper, if at all. This meant that the data wasn’t used for decision-making and that it also couldn’t help the entrepreneur to get access to loans and other investments.


The Ghana-based fintech startup has recently announced raising $700k from a consortium of investors, which will they use to grow their team, expand to Nigeria, and promote the newly launched iOS version of it’s business app.


Meghan tells us more on building OZÉ and helping small businesses digitize.


Tell us about the market opportunity you identified and the first step you took in validating the concept.


MEGHAN: The first step we took was to see if business owners that I was working with would record sales and expenses in their phones and share that data with a third party in exchange for advice. I ran that first prototype in July of 2016 before starting graduate school and worked on the idea while in school launching our product into Ghana in May of 2018. Small businesses make up the majority of firms on the continent and their needs are not being met across multiple verticals. We calculate that OZE which provides record-keeping, access to credit, and payment processing (coming soon) tackles an $18bn market.


How does OZÉ differentiate itself from its 2 closest competitors?


MEGHAN: First, we see the adoption of digital business tools fundamentally as a behavior change challenge and not a technology challenge. Our main focus is building a tool that helps small business owners for habits around record-keeping, data-driven management, and an analytical mindset in general. Secondly, we are optimized for cash transactions. While there is a lot of hype around digital payments (and rightly so), most MSMEs still transact in cash. We are trying to digitize not just payments but information about cash flows.


How do you go about acquiring customers, and what is the kind of feedback you've received so far from your early-adopters?


MEGHAN: Our customers are big OZÉ fans! We have a Net Promoter Score (NPS) of 74 which is higher than Apple’s. After Facebook ads, most of our customers actually come through referrals from our existing customer base. One reviewer of the app said, “Wow, the new interface is truly impressive. I was eagerly waiting for this and now that it is here, it was worth the wait. Thumbs up for a good job done!” Another said, “OZÉ is the number 1 business app, is very easy to use and can help you for your receipt.”


We see our customers at this phase in the company as our partners. They have helped us to co-create the features in the app, always make themselves available for usability testing, and provide a supportive community for our team and each other. I’m so incredibly grateful that they have put their confidence in this little startup and I try to pay them back by making an app that is fun and easy to use and leads to tangible improvements in their business.


Gaining momentum and getting funded


Since OZÉ launched its beta app in Ghana in 2018, a growing number of active users and paying subscribers have recorded more than 250,000 transactions in the app (with a value of more than $50 million). In 2020, OZÉ piloted a small loan portfolio with no defaults and a projected annual 43% ROI. In 2019, 97% of business owners that used OZÉ consistently were growing and/or profitable. What I want to prove in 2020 is that access to affordable capital can accelerate the progress a business owner is already making when using the app. In 2020, they also launched pilot tests in Nigeria.


On 13 January 2021, OZE announced closing $700k in capital from a seed round with investment from Anorak Ventures and Matuca Sarl and angel investors including Nigeria’s Rising Tide Africa along with existing investors Ingressive Capital and MEST. In a statement, the company said it will use the funding to grow their team, expand to Nigeria, and promote the newly launched iOS version of it’s business app.


“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.”


Forward looking


As they continue to expand in West Africa, OZÉ is on a mission to be the primary business management tool for MSMEs across emerging markets. They will know they are on the right track when opening an OZÉ account will be the first thing that an entrepreneur does when they decide to start or grow a business.


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