Yoco to secure $83 million in Series C funding

Yoco Founders

Fintech across Africa is attracting more and more, the interest of investors and venture capitalists. This is because of the great wealth of opportunities that the sector is offering. With over two billion people on the planet unbanked, and over 60% of that figure coming from Africa alone, Ashlene Ramadan emphasizes that this represents singularly one of the biggest opportunities in fintech history for Africa. Through technology, many fintechs are driving the goal towards financial inclusion for people across the African continent, while seamlessly fulfilling people’s banking needs. This is what is exploding interest and funding across the fintech space in recent times, especially with African fintechs raising a total combined value of $800 million, as of May 2021, and projected to further raise over $2.8 billion in VC funding this year.

To cap this, South African fintech startup, Yoco has recently raised $83 million in Series C funding to scale offline and online offerings and expand to new markets. This funding round was led by Dragoneer Investment Group, with participation from Breyer Capital, HOF Capital, The Raba Partnership, 4DX Ventures, TO Ventures, Partech, Velocity Capital Fintech Ventures, Orange Ventures, and Quona Capital. There were also representations by current and former executives from global tech companies such as Coinbase, Revolut, Spotify, and Gojek.

Founded in 2014 by Katlego Maphai, Carl Wazen, Bradley Wattrus, and Lungisa Matshoba, Yoco is a platform that helps bridge the gap in payments services across South Africa by helping small businesses to accept card payments in-store and online, access loans and handle effectively their day-to-day business transactions. With many small businesses still struggling to accept card payments in their business transactions, Yoco was offering an easy and flexible platform and alternative for this to be done. The pandemic further served as a catalyst to an increase in the number of cashless payments and online commerce in South Africa and across the continent.

According to Trademark East Africa, more than 70 percent of businesses in Africa are either small or medium and are strong economic blocks for growth on the African continent. Yet over 90 percent of these businesses still transact in cash and are lacking in digital payment options to manage their teeming customers. As of this year, its number of merchants has grown to over 150,000 small businesses, with over a billion dollars in transactions yearly on the platform. The company is looking at expansion across Africa and into the Middle East, targeting the growth of its user base to over a million small businesses. These funds will be used to aid this expansion as well as help the startup branch into other forms of digital payments such as QR payments, mobile money, and electronic funds transfer (ETF).

The startup is growing massively, especially following the launch of its first standalone card machine late last year that works without a smart device or Bluetooth. The Yoco Neo, as it is called, comes equipped with a 24-hour battery, an in-built SIM card, and unlimited data, to enable payments and transactions and no dependence on power or Wi-Fi connections. With this new funding at its disposal, the startup would be looking to consolidate its presence in South Africa, while branching out into other parts of the continent and into the Middle East. It will be interesting to watch how the startup executes this mission while delivering on its goal of increase financial inclusion across Africa and other parts of the world.

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