Offerzen of South Africa receives $5.2 million to expand its tech talent sourcing operations
Offerzen of South Africa receives $5.2 million to expand its tech talent sourcing operations
South African technology talent marketplace OfferZen has raised €4.5 million in Series A funding (US$5.07 million) to expand its operations and enter the European market.
Base Capital, a South African investment firm, provided additional funding to the company, which is benefiting from the increasing global demand for digital talent.
According to the company, the majority of the new funds will be used to support OfferZen's tech community in the long run.
Additional funds will be used to build out the company's operations, product, and growth teams in preparation for the company's planned expansion into two additional European countries the following year.
Candidates can register as software developers and engineers on OfferZen, a technology talent marketplace that specializes in technology. OfferZen then filters them and makes them available to businesses that are in need of the specific skills they are looking for.
In total, the developers will be live on the marketplace for four weeks, during which time OfferZen expects to receive inquiries from a wide range of businesses.
According to the company, developers are only permitted to work in positions that are permanent in nature.
Over 100k tech talents onboarded
OfferZen was established in 2015 by Philip Joubert, Malan Joubert, and Brett Jones. Using events, multiple platforms, and its own sourcing model, it seeks to promote community engagement among developers.
The company operated exclusively in South Africa for four and a half years before expanding to the Netherlands in April 2020, following the acquisition of TryCatch, an Amsterdam-based recruiting technology company, through which it acquired the company.
Over 1,000 businesses and 100,000 software developers use OfferZen's IT talent marketplace, according to Philip Joubert, the company's chief executive officer.
According to him, "access to top technology talent has become a bottleneck for many businesses, and we are in a position to assist them in overcoming this."
In addition to South Africa and the Netherlands, the majority of its clients are based in European countries such as the United Kingdom and Germany, all of which are significant global talent hubs.
A result of the company's expansion into the Netherlands and the provision of services to other parts of Europe, it experienced explosive growth in the second half of 2020. Between the third and fourth quarters, the company increased the number of placements by 29 percent.
Tech talent management
Andela and Toptal, for example, use income-sharing agreements, whereas OfferZen does not. OfferZen also does not use hourly rate charges, which are used by other tech talent companies such as Bloom Institute of Technology.
As an alternative, the South African tech talent organization is primarily funded by two sources of income.
The first is a pay-per-placement model, in which the developer is charged a one-time 12.5 percent fee on their first salary, which is deducted from their final salary.
The second model is a yearly subscription for businesses that want to hire a large number of developers at the same time and pay for OfferZen services in advance of hiring the developers.
According to OfferZen, this strategy generates 40% of the company's revenue, with the remaining 40% coming from the pay-per-hire model.
"As an added benefit, we streamline the sourcing process. Although there are many candidates on our platform, which is a good thing, businesses are also interested in finding the most qualified candidates possible. A sophisticated matching engine that identifies the most qualified candidates for open positions has been developed as a result of this "The CEO went on to explain.
offerzen.com is a platform that connects developers with a variety of local and global businesses such as Luno, ABSA Holdings, Takealot, WeTransfer, Adyen, and Catawiki.
OfferZen had been bootstrapped by the founders prior to this round. As explained by Joubert, the company has chosen this particular time to raise funds because it requires venture capital in order to expand into new European markets.
