Yoco secure $83m in first for African fintech investment
South African payments and software platform, Yoco, has secured $83m in Series C funding amid a surge in demand for digital payments amongst African small businesses.
This is the largest single investment raised by a small business-focused payments platform in the Middle East and Africa and the largest ever raised by a payments company in South Africa.
The latest investment round brings the total funds raised to date, by Yoco, to $107m. These funds will enable Yoco to accelerate the development of its financial ecosystem for small businesses, which already includes online and in-store payments, business software and capital, as well as expand its market presence beyond South Africa.
Among the company’s new investors are Dragoneer Investment Group, which is making its Africa investment debut, after having previously backed fintech giants like Chime, Nubank, Mercado Libre, Square and Klarna. Also joining the round were Breyer Capital, HOF Capital, The Raba Partnership, 4DX Ventures, TO Ventures and several current and former executives from global tech leaders such as Coinbase, Revolut, Spotify and Gojek.
The funding round also included existing Yoco investors Partech, Velocity Capital Fintech Ventures, Orange Ventures and Quona Capital.
Royal Park partners acted as exclusive strategic and financial advisor to Yoco and its shareholders throughout the transaction.
According to Katlego Maphai, Chief Executive Officer of Yoco, the successful conclusion of this fundraising round speaks volumes about the growth potential of the African small business sector.
“We are excited to partner with such world-class investors who have joined our quest to break barriers and create access to financial services for millions of small businesses across the continent,” Maphai said, “Looking ahead, this investment will unlock capacity for us to accelerate product development for our merchants and continue on our growth trajectory in South Africa and beyond.”
To support the company’s growth plans, Yoco aims to increase its team by 200 people within the coming year. Already, the business has attracted top talent to its executive ranks, including the former VP of product at Monzo, the former product marketing director at iZettle/Paypal, and the former head of communications at Uber. A new Chairman has also been brought on board, Juan Fuentes, former Managing Director of Pagseguro, a business that he grew into a $19bn payments giant in Brazil.
Maphai is confident that this latest successful funding round and Yoco’s unique small business-focused approach, coupled with its depth of talent, and now the backing of some of the world’s leading investors, positions the digital payments platform on a springboard to significant and long term growth.
“Working so closely with small businesses during a global pandemic, and in particular through a challenging socio-economic environment in South Africa, we have a firsthand account of how agile these businesses need to be in a rapidly changing world,” says Maphai. “Removing barriers and levelling the playing field by creating access to financial tools is a big part of answering these challenges. Yoco is at the forefront of solving what is critical for small businesses and enabling them to thrive. This new capital injection translates into an acceleration of access for small businesses in our region and beyond, bringing our vision of open commerce forward,” concludes Maphai.