YOCO

The idea came from lunch. Co-founder Katlego Maphai was at a small eatery in San Francisco and assumed the place was cash-only.

Then the owner pulled out a little mobile card reader. That moment stuck.

Back home in South Africa, millions of small businesses could not accept cards. The banks made it too expensive and too slow.

Maphai teamed up with Carl Wazen, Lungisa Matshoba, and Bradley Wattrus. The company was incorporated in 2013 and launched out of beta in 2015.

It started with one product. A cheap card reader that plugged into a phone.

No monthly fees. No paperwork.

Just plug in and get paid.

Yoco sells small card machines to businesses that banks would not touch. A hair salon, a food truck, a plumber.

They buy the reader for a low upfront price. Then Yoco takes a small cut of every card payment that runs through it.

That is the core of it. On top of that, Yoco sells software to track sales.

It also offers cash advances to merchants who need working capital. In other words, it starts with the card reader and sells more once the business trusts it.

The flagship is the Yoco card reader, a small device that turns a phone into a card terminal. There are readers like the Yoco Neo and Yoco Go for tap-and-go payments.

The Yoco app tracks sales and stock in one place. Yoco Capital offers cash advances based on a merchant's card sales.

Online payment links let sellers get paid without building a website.

Yoco went after the businesses everyone else called too small to bother with. A large share of its merchants had never accepted a card before Yoco.

That was the whole trick. Instead of fighting banks for existing card customers, it created brand new ones.

Cheap hardware got the reader into hands fast. Word of mouth did the rest.

By the time it raised the 2021 Series C, it was processing billions of rand a year for hundreds of thousands of small businesses.

South Africa is still a cash country. Getting a small shop owner to trust a card machine, and pay fees on every sale, is a slow grind.

Yoco also lives and dies by the local economy. When load-shedding cuts the power, card machines stop working.

When small businesses close, Yoco loses customers. It faces bigger rivals now too.

The banks woke up. Global players want the same merchants.

Staying the cheap, simple option gets harder as it grows.

Yoco's 2021 Series C was led by Dragoneer Investment Group, a US firm that also backed the likes of Spotify and Slack. Breyer Capital, HOF Capital, The Raba Partnership, and 4DX Ventures came in too.

Earlier backers like Partech, Quona Capital, and Orange Ventures stuck around. Current and former staff from Coinbase, Revolut, and Spotify also put money in.

In other words, serious global money decided South African small business was worth a bet.