OfferZen, a South African marketplace for talent in the tech sector has raised €4.5 million ($5.07 million) in a Series A funding round from South African investment company Base Capital. The funding round is OfferZen’s first since it was founded in 2015 by Philip Joubert, Malan Joubert and Brett Jones.
The tech industry in Africa is growing and this translates to increased demand in tech workers and OfferZen is leveraging on this demand. OfferZen is a talent marketplace that gives tech professionals such as software developers and engineers an enabling environment for them to meet companies that are willing to employ them. OfferZen leaves these developers on the marketplace for four weeks guaranteeing that they’ll be contacted by different companies and the best thing about OfferZen is that tech workers such as developers on its platform are only allowed to work permanent roles.
According to Philip Joubert, the CEO of OfferZen, the company has at least 1000 companies and at least 1000 software developers using its platform. The company operated solely in South Africa for four and a half years before April 2020 when it started testing other waters. The company expanded to the Netherlands in April 2020 after acquiring TryCatch; a recruitment tech startup based in Amsterdam. Although the majority of OfferZen’s users (both companies and tech professionals) come from South Africa and the Netherlands, it has other users from the UK and Germany.
Acquiring TryCatch could be one of OfferZen’s best decisions as its expansion to the Netherlands contributed significantly to its growth in the second half of this year. The company has experienced 29 percent growth in placement between the third and fourth quarters. A statement by OfferZen’s CEO read “Tech hiring came to a near standstill in the first half of 2020 due to COVID. Since then, however, we’ve seen a huge acceleration in the market — companies are now raising far more capital than they were pre-pandemic, investing more in technology and subsequently hiring much faster. Access to top tech talent has become the bottleneck for many companies and we’re in a position to help companies solve that”.
OfferZen operates differently than other similar platforms. It doesn’t use hourly rates used by Andela and Toptal, or income-sharing agreements used by Bloom Institute of Technology. Instead, OfferZen employs two models.
OfferZen makes companies make an annual subscription to gain access for its services. According to OfferZen, this accounts for 40 percent of its revenue. The second model is called pay-per-placement with a 12.5 percent one-off fee of the developers first salary.
Like every other successful company, OfferZen faces competition and according to its CEO, what sets OfferZen aside from others is the company’s focus on building an engaged developer community through events and different channels and its sourcing procedures. “We have a solid user base with very high-quality developers in our developer community. So we’re very, very well known [and] we invest a lot in the community,” he said.
He also added that “we also simplify the sourcing process. So we obviously have a lot of candidates on our platform, which is a good thing, but then companies also want to find the most relevant candidates. And so we have a sophisticated matching engine that shows the most relevant candidates for the positions that companies are currently hiring for”.
The recently acquired funds will be pushed into developing OfferZen’s growing tech community as well as expand into more European territories, growing its operations, products and teams.