Yoco, the go-to South African platform for accessing offline payments among merchants has announced $83 million in Series C funding to scale offline and online offerings and expand to new markets.
Dragoneer Investment Group, which has supported fintech titans like Chime, Klarna, Nubank, Mercado Libre, and Square, spearheaded the investment. New investors Breyer Capital, HOF Capital, The Raba Partnership, 4DX Ventures, and TO Ventures joined existing investors Partech, Velocity Capital Fintech Ventures, Orange Ventures, and Quona Capital, as well as existing investors Partech, Velocity Capital Fintech Ventures, Orange Ventures, and Quona Capital. Current and past executives from global internet businesses like Coinbase, Revolut, Spotify, and Gojek were also in attendance.
“We want to offer whatever payment methods our merchants need. And we did start in the in-person payment space, focusing on terminals, which was where the biggest demand was,” chief business officer Carl Wazen said. “But the pandemic, which had a devastating effect on so many businesses that relied on in-person trade, accelerated the need for businesses to accept payments online.”
The company is also taking advantage of a recent trend in which African soonicorns and unicorns are hiring former top executives from global organizations to help them take their businesses to new heights.
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“We couldn’t be more excited to partner with the Yoco team,” Christian Jensen, co-head of private investments at Dragoneer, said in a statement. “At Dragoneer, we look for great teams that are building durable businesses with wonderful economic models, and that is exactly what we’ve found at Yoco. Yoco is already beloved by customers, and the product roadmap that the company is investing behind will drive even more value for merchants. While there is tremendous room for continued growth domestically, the opportunity for Yoco goes well beyond South Africa.”
The Series C investment in the company is the largest of its kind in South Africa and one of the largest for any African fintech (third only to Flutterwave and Chipper Cash). Wazen also claims to be the Middle East and Africa’s largest small business-focused payments platform.
The investment unarguably came as a result of the company’s strong traction. Over 6 million small businesses in South Africa still deal in cash, which presents a big opportunity for Yoco. According to Yoco, the number of entirely cashless small companies increased by 300 percent from March to July 2020. The company presently supports 150,000 of these businesses and is growing at a rate of over 500 merchants every day. It claims to process more than $1 billion in card payments per year, and it has processed more than $2 billion in card payments in its six years of operation.
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What You Need To Know About Yoco
Founded in 2013 by, Yoco is a South African (M)SMEs-focused mobile point-of-sale (mPOS) firm founded in 2013. Small companies can take digital payments via cards and electronic payment platforms thanks to the company’s collaboration with acquiring banks. Yoco sells mPOS systems to merchants and then makes money from transaction fees. Yoco also provides clients with an electronic gateway via which they can monitor inventories and transactions, as well as a lending product through which they may obtain working capital loans.
Carl Wazen co-founded Yoco after spending seven years as a management consultant and private equity investor in Africa and the Middle East, assisting multinational telecom operators in expanding their African footprint at the height of the continent’s telecoms boom.
Juan Fuentes, the former managing director of fintech unicorn Pagseguro, has been appointed as the company’s new chairman.
Yoco’s thriving business has three key accelerators, according to Wazen. The company’s product capabilities come first, followed by its platform, and last, it’s market presence. This investment will help to speed up all three of these processes. On the product side, Yoco is evolving from a payment acceptance company to a whole financial ecosystem.
Yoco expects to reach a million SMEs in the next four years, with over 100 million SMEs transacting in cash throughout both areas.
Yoco is expanding its staff by 200 individuals remotely and across its offices in Cape Town and Amsterdam over the next year to achieve this.
The company is also taking advantage of a recent trend in which African soonicorns and unicorns are hiring former top executives from global organizations to help them take their businesses to new heights.
Yoco’s latest additions include a former VP of product at Monzo, a former product marketing director at Paypal, and a former head of communications at Uber, according to the company.
Juan Fuentes, the former managing director of fintech unicorn Pagseguro, has been appointed as the company’s new chairman.
Yoco has raised $107 million to date.
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