Ozow nets follow-on funding from Kalon Venture Partners for Series-A round

Kalon Venture Partners announced yesterday that it had made a follow-on investment in Ozow (formerly i-Pay) of an undisclosed amount.

Ozow, which was founded as i-Pay in 2014 by Mitchan Adams, Thomas Pays and Lyle Eckstein (pictured above, from left to right), facilitates bank-to-bank automated and instant electronic funds transfers (EFTs) in a matter of seconds.

Ozow claims its EFT technology issuperior to any other solution in the market. In 2017 the startup secured a R10-million investment from the VC company, which is a registered Section 12J VC fund (see this story).

Kalon Venture Partners said the follow-on investment in Ozow is part of the startup’s Series-A round

Kalon’s announcement yesterday was made in an email to shareholders, shared with Ventureburn by the VC fund’s CEO Clive Butkow.

Butkow told shareholders that the VC has made “numerous” investments in Ozow from its first fund and that the current investment is a follow-on round to provide growth capital to the business.

“The investment takes advantage of the significant growth being experienced in Ozow and is part of a larger Series-A round of capital.

“Ozow has received numerous term sheets for their Series-A round and they are currently evaluating a number of international and local investors to complete the round,” Butkow told shareholders.

Neither Butkow or Pays, who is also Ozow CEO, would reveal the specifics of the deal, including the size of the investment, when asked to comment by Ventureburn today.

When Ventureburn emailed Pays, he said the startup is in the middle of raising its Series-A funding and was not ready to divulge any details of the raise it made from Kalon.

Butkow would not reveal how much the startup had raised, saying only that the startup is “raising a large round for growth into new markets”.

‘Annual transactions up 141%’

Meanwhile, in the email yesterday to shareholders, Butkow said Ozow transactions processed had grown by 141% in the past 12 months and added that the startup has completed over a million transactions per month since March.

“Ozow continues to increase their application capabilities. Ozow completed their Xero Integration. They have also developed a tokenised solution with a pilot to commence in June with Flow Living. The Market launch is scheduled for August this year.

Butkow said Ozow has developed new partnerships with a number of companies namely, Clickatell and Devcode and have added merchants such as MTN, SuperSonic, Le Creuset, Homechoice, Intercare, Flight Centre, IFX Brokers Holdings, Silulumazi and Grow Biz Wealth.

Ozow’s expansion plans, he said, include entering other African markets, while the company consolidates and builds its presence in the SA and recently entered Namibian market.

Kalon fund two set for R100m

In February, Butkow told Ventureburn that fund two, for which Kalon is currently raising, has no targeted close, but he added at the time that R100-million raised over three years would be a suitable figure.

He said at the time that his VC has raised R107-million over the 36 months, the period that Section 12J rules allow funds to raise capital (see this story).

It’s two other recent investments include one in proptech startup Flow announced in January (see this story) and another in FinChatBot announced in November last year (see this story).

Butkow said at the time that not all of the funds had been deployed, and that the fund could likely invest in three or four more startups and still be left with 20% of the original capital, with which to use towards a next round.

Read more: We’ve hit burst of NOS from Fast and Furious – i-Pay CEO ahead of $5m raise
Read more: Fintech startup i-Pay secures R10m investment from Kalon Venture Partners

*Correction: In the initial version of this story we mentioned that Kalon Venture Partners CEO Clive Butkow said Kalon is looking to raise a “large round” for a second fund. Butkow was in fact referring to Ozow’s Series-A. The story has therefore been amended.

Featured image (from left to right): Ozow (formerly known as i-Pay) founders Mitchan Adams, Thomas Pays, Lyle Ekstein pictured at the launch of the newly rebranded startup, in Johannesburg in April (Facebook).