South African point of sale (PoS) payments provider Yoco has raised a Series B round of US$16 million, which it will use to grow its network of small business merchants, invest in product development, scale its operations and attract top-tier fintech talent.
Yoco builds tools and services to help small businesses 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.
The startup has now taken its total raised funding to US$23 million with the Series A round, which is led by Partech, with participation from Orange Digital Ventures, FMO and existing Series A investors Quona Capital and Velocity Capital. Yoco raised Series A funding early last year.
Yoco’s strategy is to partner with small businesses early in their lifecycle 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”, said Katlego Maphai, Yoco co-founder and chief executive officer (CEO).
“Our Series B investment allows us to continue to scale our operations and deliver a world-class product experience that enables small businesses to thrive.”
Cyril Collon, partner at Partech and now on the Yoco board of directors, said the startup was a top fintech company, not just 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 US$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,” he said.
Yoco has long-term ambitions to be a pan-African player, and has explored various Sub-Saharan markets in the past year, including running pilots in two markets.
“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,” said Carl Wazen, Yoco co-founder and chief business officer.