Yoco, the South African-based Point of Sale payments provider, has raised a Series B round of US$16M led by Partech with participation from Orange Digital Ventures, FMO (The Dutch Development Bank) and existing Series A investors Quona Capital and Velocity Capital.
The firm will use the funding to grow its network of small business merchants, invest in product development, operational scalability and attracting top-tier fintech talent. The latest raise brings the company’s total investment to US$23M. Cyril Collon, General Partner at Partech and Co-lead of the Partech Africa Fund will join Yoco’s Board.
According to Cyril Collon, partner at Partech: “Yoco has built a product set and quality operations placing it as a top fintech company not only in South Africa but also globally. We are excited to have Yoco as the second investment from our Africa fund. Consumer spending in Africa amounts to over $1.4 trillion, much of which is driven by small businesses. Yoco’s ability to use technology to solve real problems for African small businesses at scale makes it a unique implementation of our investment strategy”.
Yoco enables SMEs to accept card payments and manage their day to day activities. Since launching its first product in late 2015, a card reader that connects with a merchant’s smartphone or tablet, the company has grown its base to over 27,000 South African small businesses, 75% of which had never accepted cards previously.
Founded by Katlego Maphai (CEO), Carl Wazen (Chief Business Officer), Bradley Wattrus (CFO) and Lungisa Matshoba (CTO), the fintech company was built to address the pain points that small businesses face when trying to get a card machine. Yoco’s strategy is to partner with small businesses early in their life cycle and actively help them grow. It has been adding services to its payments solution, which now includes point of sale software, business intelligence, accounting integrations, and working capital financing, in its bid to create an operating system for the small business.
“Small businesses, fundamental to sustainable economic growth, are generally underserved in our part of the world due to their size. Running a business is hard enough, we believe accepting money shouldn’t be. We built Yoco on the key pillars of access and trust. Transforming the long and prohibitive process of applying for a card machine into a simple consumer-like product purchase that can happen online or at the store in minutes”, says Katlego Maphai, Yoco Co-founder and CEO.
Yoco is adding more than 1,500 new merchants every month, making it South Africa’s largest and fastest growing independent card payments provider by number of merchants, more than tripling in size since raising its Series A in early 2017.
“We envision that millions of small businesses across the continent will one day use a connected, digital platform to run their businesses and we want to be that platform. The model and approach will differ per market and we are playing a long game. Our new investors are global with strong African footprints and will be great partners in this journey,” says Carl Wazen, Co-founder and Chief Business Officer.