The company said in the post the funding represents the biggest single investment round completed by a South African payments company.
Yoco’s goal is to deliver financial tools for small- to medium-sized businesses (SMBs), according to the post. Many of the SMBs in that part of the world use cash rather than digital payments, and thus do not benefit from inclusion in that economy. Yoco wants to help them shift toward digital and will use the new funding to do so.
The company said in the post that the pandemic and the subsequent accelerated digital shift only made it more important to help SMBs transition.
Yoco serves more than 150,000 SMBs and microbusinesses in South Africa, and its goal is to get to 1 million, according to the post.
Africa has been undergoing a shift away from cash as most of the world has, PYMNTS reported.
According to DPO Group CEO Eran Feinstein, the amount of people owning mobile phones is going up all the time in general. Feinstein said his company wants to help those hundreds of millions of consumers to transact online.
“We don’t need to build new technology to do that; the technology is already here,” he said. “We need to connect it all so that it can be leveraged more broadly.”
PYMNTS reported that cash flow for SMBs in South Africa has long been touch-and-go, and it’s difficult for them to get capital anyway.
Traditional routes for funding come with high decline rates and slow applications, according to Thomas McKinnon, head of product at Lulalend. Many times, SMBs are more adversely affected, with around 90 percent of the applications declined by traditional lenders.