INSUBCONTINENT EXCLUSIVE:
A week after PayPal led a $50 million round in the cross-border payment specialist PPRO, one of its big competitors in the developing world
has announced an acquisition of its own in the same space.PayU — the payments division of Naspers that is sometimes described as the
PayPal of the developing world — has acquired Zooz, a startup based out of Israel that provides an API to merchants that lets them accept
a variety of payments depending on the market.
The two had already been working together — specifically to provide PayU payment options to
merchants in markets where PayU is active — and the plan will be to integrate the services further to enable PayU to step deeper into the
cross-border payment services space, potentially even by enabling the integration of the payment methods of competitors as part of the mix
of payment options.
&In the choice between building a closed walled garden and open platform, we decided to go with the second model,& PayU
CEO Laurent le Moal said in an interview
&The reality is that you need to be neutral and work with everyone.&
PayU will also invest in adding further features to the Zooz platform,
such as fraud management (which you could argue is table stakes these days in payments), real-time reporting and smart routing.
Zooz whole
team of 70 will be joining, including co-founders Oren Levy (CEO) and Ronen Morecki (CTO), who will respectively take senior roles at PayU
as business development with larger merchants, and CTO of innovation.
Terms of the deal have not been disclosed, but that PayU has said that
this deal brings its total spend on acquisitions and investments to about $350 million to date
That includes acquiring CitrusPay for $130 million, investing €100 million (between $120 million and $130 million) in Kreditech and
several other investments
Doing the math, this potentially puts this deal at a range of between $50 million and $100 million.
Zoozwas founded in 2010 and had raised
around $33 million, from investors that includeTarget Global Ventures, Fang Fund,iAngels, Kreos Capital and existing investorsBlumberg
Capital,lool ventures,Rhodium, Claltech (Access Industries& Israeli tech vehicle),XSeed Capital,CampOne Venturesand angel investor Eilon
Tirosh.
Similar to PPRO, the company in which PayPal invested earlier this month, Zooz service addresses the widespread fragmentation that
exists in payments globally.While credit cards are very much the norm in the US, globally they account for just under 20 percent of all
e-commerce transactions, with consumers and businesses in different geographies developing their own localised payment methods and
For example, cash on delivery or deposited with convenience stores, or bank transfersalso play big roles.
This can be a problem for a
merchant that is based in one country but interested in selling to people in another — an opportunity estimated to be worth $994 billion
globally — if it doesn&t accept whatever the local payment method happens to be
Zooz addresses this by providing an API to merchants that gives them the option of a number of payment providing companies and methods so
that they can enable the most popular variety of payment options to buyers depending on the market.
It will be worth watching whether
payment companies will continue to be happy integrating with Zooz after its sale to PayU is complete
The fact that Zooz already integrates with different payment options, and itself is not a payment services provider, was one reason why PayU
was interested in it.
At a time when there are multiple options for payment methods, including PayU itself, there is potentially an
opportunity to be able to make revenues by trying to play in as many of those transactions as possible
Notably,PayUalready lets people integrate some 250 methods into its own wallet, and it says it the leading online payment service provider
in 16 markets out of the 17 in which it is active..
Zooz potentially will be boosting that footprint with more than just a platform that
enables multiple payment options, but the transaction data and analytics that come with those transactions, which can become useful for
other services in other parts of the business.
&The unique contribution we bring toPayUis an advanced technological layer which not only
helps merchants worldwide to upscale their operations and provide a better customer experience, but also offers analytics and optimization
capabilities that equip them with unprecedented insights,& noted Levy, Zooz CEO.
