In 2022, technology and digital solutions will continue to revolutionise the world of business in Africa. Cash payments are tending to give way to faster, more secure electronic payments. In this sector, Yoco, a South African fintech, is one of the pioneers in Africa. In less than two years since its launch, the start-up has enjoyed a meteoric rise, providing small and medium-sized businesses in South Africa with modern electronic payment tools to develop their business. In this new story, let's (re)discover the fintech that is transforming card payment services in South Africa.
Technology to revolutionise payment methods in South Africa
It all began in 2009, when Katlego Maphai and Carl Wazen decided to combine their skills to create a high added-value business. Without having a clear idea of their concept, the two friends left the firm that employed them to embark on an entrepreneurial adventure. It was only after numerous meetings with the directors of South African SMEs that the two partners came up with the idea of creating tools and services that would make payment by bank card accessible to small businesses. The two partners embarked on this ambitious project before being joined by Bradley Wattrus and Lungisa Matshoba.
In 2015, Yoco was officially launched with $4 million in capital from love money (friends and family) and business angels. The startup offers mobile terminals to enable SMEs to collect electronic payments more easily without going through traditional banks. In just one year, Yoco has increased its user base tenfold, from 500 to 5,000.
This rapid development on a buoyant South African market enabled the young company to raise $23 million between 2016 and 2018 from investment funds such as Partech, Orange, FMO, Velocity, Greyhound and CRE. Building on this success, the startup quickly surpassed 30,000 users by the end of 2018.
The following year, with the restrictions linked to the pandemic, the fintech was even more creative in its support for retailers. So, in addition to its offline technological solution, Yoco developed a digital 100% platform to offer its users the possibility of cashing their payments, this time online, and continuing to develop their business. The start-up had become the preferred payment solution for small and medium-sized businesses in South Africa. So it came as no surprise when, in July 2021, it once again managed to raise $83 million in Series C funding, backed by Dragoneer Investment Group. Today, Yoco processes more than two billion dollars in transactions per year.
Supporting SMEs and reducing socio-economic inequalities
Despite its status as one of the most advanced economies in Africa, South Africa is still showing signs of profound social disparity. Unemployment, particularly among the black population, is on the rise and poverty levels are increasing. Supporting merchants and small and medium-sized businesses in their day-to-day operations and development is a way of creating wealth more equitably and helping a deprived section of society. The founders of Yoco, which employs around 350 talented people, understood this very early on.
More than 250,000 companies are now using the platform as a payment solution and developing their business. In addition, the fintech has set up Yoco Capitala fast and flexible cash advance to support small businesses using its payment services. Building on its experience in South Africa, the fintech also plans to offer its solutions to a larger number of merchants outside its borders, to give them easier access to modern technological tools capable of supporting their growth.
Recognised today as one of the leaders in mobile payment by card in South Africa, Yoco has developed a business model that combines economic performance with a positive social impact. This quickly won over the South African market, as well as major investment funds such as Partech. The fintech can also count on its founders to propel it even further and dream of a pan-African company with a presence in all emerging markets.
