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South African point-of-sale fintech start-up Yoco has big expansion plans on the back of the $16 million it raised from investors this week, CEO and co-founder Katlego Maphai has said.
Following this week’s funding, the total amount raised by Yoco from investors now stands at $23 million since the company was launched in October 2015.
The company’s headquarters are in Cape Town and it has 27 000 local merchants, largely small businesses, using its services.
With this latest investment, Yoco would like to increase the number of merchants on its system to 100 000 by late 2020, compared with estimated local small businesses of more than a million.
Right now Yoco has 100-plus staff members and in the next two years the company plans to add another 50 staff members.
Yoco offers small businesses a card reader and a mobile app, which can be used by these businesses to allow customers to pay for goods and services using a number of payment options.
Maphai said Yoco was creating a new market as 75% of the merchants that used its product had not used a point-of-sale device or a card for sales and previously either used cash or electronic funds transfers.
Yoco merchants typically had sales of between R10 000 and R200 000 a month.
Pilot projects
About a third of Yoco’s merchants were in the food, drink and hospitality sector, 25% were in independent retail trade and 16% were in the healthcare, beauty and fitness sectors, he said.
Since inception, Yoco had facilitated 11.8 million transactions worth almost R4 billion. In the rest of Africa Yoco is conducting two pilot projects in eastern Africa but Maphai declined to say where the pilots were taking place.
The $16 million raised this week came from Partech, a venture capital firm based in Silicon Valley, with participation from Orange Digital Ventures, Dutch Development Bank FMO, South African asset manager FutureGrowth, Quona Capital and Velocity Capital.
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