Yoco, South African based fintech start-up has secured R248-million (US$16-million) from different international and local investors. The fund was raised in a Series-B round led by Partech, a venture capital firm based in Silicon Valley, Europe and Africa.
Other investors who participated in the round are; Orange Digital Ventures, FMO (the Dutch Development Bank), South African-based FutureGrowth, and existing Series-A investors Quona Capital and Velocity Capital. However, Co-Lead of the Partech Africa Fund and General Partner at Partech; Cyril Collon will join Yoco’s board.
According to Tech Central, this fund will bring the start-up’s total investment to $23m, but they refused to disclose the shareholding structure following the new funding round.
The company intends to use the new funding to grow its network of small business merchants, invest in product development, operational scalability and attracting fintech talent.
Founded by Katlego Maphai (CEO), Carl Wazen (Chief Business Officer), Bradley Wattrus (Chief Financial Officer) and Lungisa Matshoba (Chief Technology Officer), the idea behind Yoco was to “address the pain points that small businesses face when trying to get a card machine”.
Only 7% of South African small businesses accept card payments, despite the country having a card penetration of 75%, the company said. “There are over a million small businesses in South Africa ripe for card acceptance.”
The company’s key go-to-market channel is digital, though it has a retail store in Parkhurst, Johannesburg, where merchants can find its hardware and sign up. It plans to open at least one store in each of South Africa’s major cities. It’s hardware is supplied by UK partner Miura and the company said it is “hardware agnostic”, preferring to focus its efforts on the software that powers the platform.
Over time, it also wants to expand elsewhere in Africa. It has explored various sub-Saharan markets in the past year, including running pilots in two markets.