Yoko card machine.
Yoko card machine.
  • Yoco gets a hefty $83 million (R1,24 billion) investment from several US and European based investors.
  • It plans to use this money to increase its customers from 150,000 to a million in the next four years.
  • It is planning to expand in SA, Africa, and the Middle East
  • This is the third time the group has received investment from US and European-based investors.
  • It has so far attracted investment totaling $107 million (R1.5 billion).


Local payment and software platform, Yoco has received a hefty $83 million (R1,24 billion) investment from several US and European-based investors. It plans to use this money to increase its customers from 150,000 to million in the next four years.

Yoco, which initially specialised in facilitating card payments and has since branched out into online payments and even small business loans, will use this funding to "develop new products to reach more merchants," says Yoco co-founder and chief business officer, Carl Wazen.

Wazen says the plane is to continue with its rapid expansion in SA and through the rest of the continent, and even further.

"There are over 6 million small businesses in South Africa and well over 100 million across the Middle East and Africa that still transact only in cash," he says.

He adds: "We have set ourselves an ambitious goal of reaching a million merchants within the next four years and expanding into Africa and the Middle East region within the next year."

This is the third time the group has received investment from US and European-based investors, bringing the total amount invested in the group to $107 million (R1.5 billion).

The firms that invested in it are: Dragoneer Investment Group, Breyer Capital, HOF Capital, The Raba Partnership, 4DX Ventures, TO Ventures, investors Partech, Velocity Capital Fintech Ventures, Orange Ventures, and Quona Capital.

Not alone

Though this backing is good news for Yoco, it however, operates in an increasingly competitive market that has established players like the large banks and new rivals, like Nigeria's Paystack fighting for their share of it.

Despite the increasing competition, Wazen says it has the edge because it is focusing on winning over micro traders who have never used card payment devices to conclude transactions.

"Even now, six years after we started, about 80% of our customers have never used a card machine."

But, even though Yoco has a healthy war chest to fund its expansion, it's not blind to the danger of its platform being overtaken by other technology.

When asked about the possible danger of seeing a phone somehow being turned into a rival payment device, Wazen says it's not Yoco's payment devices – it sells them at close to cost – but rather the backend payment platform it offers to its customers, which is is the real product.

Yoco's cheapest device sells for R399 and it charges a commission of 2,95% per transaction. This model has seen it process transactions worth $1 billion a year (R14.5 billion).

Using the information derived from the platform also forms part of Yoco's growth. It, for example, enables Yoco to gather financial data on their customers, which it then uses to assess if they qualify for a small business loan.

Yoco's platform also allows its customers to spot patterns in their own data, like what products are selling well and also to deal with admin issues, like putting together sales reports and managing inventory.

Although the group's move into these kinds of financial services is an important part of its future, Wazen notes that the local market for card payment devices is untapped because the bulk of transactions are still settled with cash.

A 2019 Rapid Payments study conducted by PwC & BankservAfrica backs up this view. It estimated that South Africans transacted about 1,500 times a year across formal and informal channels, where about 90% of the transactions are cash-based and mostly below R100.

This is changing, as GlobalData, lead banking and payments analyst, Ravi Sharma points out that the South Africa card payment market has been on the rise for the past few years, and that this trend looks set to continue.

"[With] improving payment infrastructure and rising contactless and e-commerce adoption, the card payments market is expected to grow at a compound annual growth rate of 7.7% between 2020 and 2024 to reach R1.8 trillion in 2024."


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