You’ve probably encountered a Yoco card machine at one of the many small businesses in Cape Town. They provide an alternative bank card payment method that they say is seven times cheaper than traditional alternatives, because they don’t have monthly fees and lock-in contracts.

The South African company has thus far been so successful that they are growing by more than 1 500 merchants every month.

Business Insider reports that Yoco has now managed to raise $16 million (R245 million) in series B funding, after tripling its users to 27 000 since the beginning of 2017.

Nicely done.

Silicon Valley-based venture capital firm Partech, which led the series of funding, has dubbed Yoco one of the top fintech companies in the world.

Other funding partners include Orange Digital Ventures, Dutch Development Bank FMO, South African-based FutureGrowth and existing Series A investors Quona Capital and Velocity Capital.

“[Considering that] consumer spending in Africa amounts to over $1.4 trillion, much of which is driven by small businesses, Yoco’s ability to use technology to solve real problems for African small businesses at scale makes it a unique implementation of our investment strategy,” Cyril Collon, partner at Partech, said in a statement.

Yoco, which employs more than a hundred people in Cape Town, was formed in response to the difficulty that young businesses have when trying to get access to card machines.

Only 7% of South African small businesses accept card payments, despite South Africa having a card penetration of 75%, Yoco CEO and co-founder Katlego Maphai said.

“Small businesses, fundamental to sustainable economic growth, are generally underserved in our part of the world due to their size.”

Maphai said the Series B funding allows them to scale their operations.

“Running a business is hard enough, we believe accepting money shouldn’t be,” he said.

Instead of paying rental fees on a bank-related card machine, you can get a Yoco card reader for a once off payment of R1 800 or 16 weekly payments of just under R150.

The company charges no monthly fees after that, only a per-transaction fee starting at just under 3%, which starts decreasing with a turnover of R20,000 a month.

Anything that supports small businesses, and especially local ones, is fine with me.

[source:businessinsider]