South African fintech startup Yoco raises 83 million Series C fund

Small and medium-sized enterprises (SMEs) contribute significantly to the economic success of many countries, especially developing countries. They are the backbone of most economies. Globally, SMEs makeup about 90% of existing businesses and generate more than 50% of employment.

In South Africa, these businesses account for about one-third of the country’s GDP. Last year, the coronavirus pandemic threatened the existence of these small businesses, and the impact was protracted as owners were worried about revenue, sales and cash flow.

FinTech in South Africa since its launch in 2013 side Has established itself as a reliable platform for accessing offline payments among merchants in the country. Today, the company announced $ 83 million in Series C funding to expand its offline and online services and expand into new markets.

South African card and mobile penetration is over 70%, but South African SMEs are still struggling to accept cards. Yoco’s portable card machines have proven to be good at solving this problem. At TechCrunch Covered the company Three years ago, Series B raised $ 16 million, but the platform was used by just over 30,000 merchants. Currently, that number has quintupled.

Yoco has built an online service as it has grown exponentially in offering offline payments. After being in beta for a while, the rollout is now in line for a few days with the blockade of South Africa last March. In this way, South African merchants can continue to accept payments on the platform.

“We want to provide every payment method that merchants need, and we started with the face-to-face payments area, focusing on the devices that were in greatest demand,” said CEO. .. Karl Wazen Said. “But the pandemic that had a devastating impact on so many companies that depended on face-to-face transactions accelerated the need for companies to accept payments online.”

During the blockade in South Africa, the sentiment of all small business owners fell to a record low of -12 on a scale of -100 to 100 in the second quarter of 2020, according to Yoco’s small business pulse monitor. did. Since then, the easing of the blockage has improved, giving businesses more freedom to continue to pay face-to-face. As a result, Yoco’s online payments are a small part of the transactions that take place on the platform.

But that doesn’t mean that people are trading in cash. In fact, according to Wazen, the opposite is true. One of the post-pandemic actions, Mr Wazen said, was that when the blockade was lifted, people stopped using cash and returned to accelerate face-to-face payments. “Recent consumer behaviour has shown a shift from cash, and businesses need to adapt quickly to this change. This is a huge opportunity and it is our mission to support that transition.” He added.

CEO earlier this year Cattle sesame pie Yoco said it is trying to extend the service to other aspects of digital payments. He cited mobile money, QR payments, and electronic funds transfers (ETFs) as pipeline offerings. Wazen confirmed this but did not provide up-to-date information on where the company puts these products. However, he said the company is still a card-focused payment provider.

As South Africa’s most important card payment provider, Yoco’s strategy is to create access and remove barriers to adopting digital financial services. The company does that by focusing on product features that Wazen claims to be the most comprehensive for small businesses. He also adds that, in terms of market presence, Yoco is the easiest way for merchants to seamlessly access services through a variety of channels.

“We now have a recognized brand. That’s how we win, and in our opinion, that of a market that people like other competitors don’t fully focus on. Keep focusing on the part as much as possible. “

South Africa has more than 6 million SMEs and still trades only in cash. This offers Yoco a great opportunity. According to the company, the number of completely cashless SMEs surged 300% between March and July 2020. Yoco currently serves 150,000 of these companies, adding more than 500 merchants per day. The company claims to process over $ 1 billion in card payments annually and has processed over $ 2 billion in card payments over the six years.

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