South Africa's Mobiz nabs $4M to expand personalized SMS marketing into the US

·4 min read

Mobiz, a South African startup integrating hyper-personalization into mobile marketing, has raised a pre-Series A round of $ 4 million from HAVAÍC, Futuregrowth, Launch Africa, Allan Gray E-Squared Ventures, CapaciTech and Endeavor's Harvest Fund.

The investment comes as the startup is ramping up efforts to expand into the U.S. and double down on marketing, sales and account management. Part of the investment will be used to hire more staff in South Africa and support the commercial expansion to the U.S.

Mobiz works as a code-free tool that helps marketers, enterprises and SMBs create and send SMS campaigns to their customers without any marketing experience. CEO Greg Chen founded the company in 2014 came from his 15-year span in the mobile industry, noticing how enterprises in South Africa struggled to target and engage their customers via SMS efficiently.

"In South Africa and Africa general, there are a lot of companies using SMS marketing, but it's not giving any value to them because they lack digital marketing skills," he said to TechCrunch over a call. "So we came to enable businesses to deliver personalized digital content via a personal landing page that can be built easily within the Mobiz platform and deliver on the SMS channel."

Seven years in, the company works with more than 100 brands, such as MultiChoice, Experian, HomeChoice and New Balance. Per data from Mobiz's website, SMS messages delivered by the company are read within three minutes with a 98% open rate.

The company said that these messages range from offers and specials and loyalty programs to crisis communication and ticket sales.

Having gained a significant market share in the South African SMS marketing space, Mobiz is turning its sights on providing its service to small and medium businesses. However, the target market is in the U.S. and not the African country where the company started. According to Chen, the company sees potential in the U.S.' small and medium business market because "its product is easy to use and suited for the big market opportunity in the U.S."

"How we've disrupted our space in South Africa, we see an opportunity over there. So we want to help many SMBs easily produce beautiful customer engagements that are personalized at scale to make them clickable within 10 minutes on their platforms. That's our thesis and we are very hopeful that we will work out."

The SMB market in the U.S. is projected to reach $12.5 billion and is expected to register a CAGR of 20.3% from 2019 to 2025, according to a report by Grandview Research.

Chen says that part of this growth is buoyed by the ineffectiveness of email marketing in the U.S (similar to SMS marketing in Africa) where customers are inundated and spammed.

SMS marketing in the U.S., on the other hand, has more value because customers need to give marketers and businesses consent to receive regular SMS messages from them. For these businesses, it means that customers who provide them with access actually want to engage.

"This has revolutionized the way marketers used to think about things when they used to say more is better. Now it's talking to the people who actually want to buy from you and spending more money in acquiring them in a consent way and then engage with a very high return investment in the most direct channel and is no more direct channel than SMS," said the CEO.

With Mobiz, small and medium businesses such as a coffee shop can quickly know the particular type of coffee 100+ customers like because of the information gathered from templates used on the platform. This dynamic and instant customization improves conversions, results, sales, and engagement rates for these businesses.

This month, the company is going live with more than 200-plus beta users in the U.S. currently active on the platform.

As an early backer of the company, partner at HAVAÍC Grant Rock said his firm has been most impressed with Mobiz's execution in South Africa. But with the company going across borders, it will need to consider pricing as it faces competition with incumbents such as Textedly and TextMagic. Its subscription fees start at $29 per month and increases depending on the number of SMS businesses and marketers want to send.

Chen adds that now that the company is going full tilt in the U.S. market, plans are set to raise a subsequent Series A round in the coming months.

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