YOCO, the fast growing Cape Town-based fintech business, has underlined its longer term potential by raising a not insubstantial $83 million (almost R1.25 billion) in its latest fundraising effort.
Yoco, which has raised some $107 million (around R1.55bn) from investors so far, pitches its hand held payment devices and software applications mainly to small business merchants.
In less than six years, Yoco has processed over $2 billion in card payments, and currently services 150 000 small and micro-merchants all over South Africa.
The fresh capital raised will help Yoco accelerate the development of its financial ecosystem – which includes online and in-store payments, business software and capital – as well as expand its market presence beyond South Africa.
Some of the big investors chipping into the capital raising included Dragoneer Investment Group (which has previously backed fintech giants like Chime, Nubank, Mercado Libre, Square and Klarna), Breyer Capital, HOF Capital, The Raba Partnership, 4DX Ventures, TO Ventures and several current and former executives from global tech leaders such as Coinbase, Revolut, Spotify and Gojek.
Existing Yoco investors – like Partech, Velocity Capital, Orange Ventures, Quona Capital and Old Mutual’s Futuregrowth – also participated in the fund raising exercise.
Katlego Maphai, the CEO of Yoco, said it was the company’s quest to break barriers and create access to financial services for millions of small businesses across the continent.
“Looking ahead, this investment will unlock capacity for us to accelerate product development for our merchants and continue on our growth trajectory in South Africa and beyond.”
“He said Yoco’s growth has been driven almost exclusively by small, independent businesses that were previously cash-only due to the complexity and high costs of existing alternatives.
Carl Wazen, Yoco’s chief business officer, said that despite Yoco being the largest payments platform in South Africa, there was still ample growth opportunities. “There are over six million small businesses in South Africa and well over 100 million across the Middle East and Africa that still transact only in cash.”
He said recent consumer behaviour showed a shift away from cash and businesses have to rapidly adapt to this change. “This presents a huge opportunity and it is our mission to support that transition.”
Aside from reinforcing its market presence in South Africa, Yoco has plans to expand into African markets and the Middle East. Wazen says the medium term goal is to reach a million merchants.
