The archive · Money & Fintech · Strategic decision · 2013–2021
Yoco's card-reader bet: SA's cash-only SMEs get terminals, then an $83M round
Founded 2013 to let South Africa's cash-only small businesses take card payments, Yoco reached 150,000+ merchants and an $83M Series C by 2021.
Yoco
What the business is
Card machines and software that let micro and small businesses accept in-store and online payments, access loans and manage daily operations.
Starting capital：Total raised $107M by mid-2021: a $16M Series B in 2018, then an $83M Series C in July 2021 led by Dragoneer Investment Group.
How it started
Yoco launched in South Africa in 2013 on a contrarian read of the market: card and mobile penetration among consumers was over 70%, yet most small businesses still transacted only in cash, because bank-issued card machines were expensive to rent and hard to qualify for. CEO Katlego Maphai and his team built a portable, app-connected reader to close that acceptance gap.
What happened
After a $16M Series B in late-2018 the company served just over 30,000 merchants; three years later that number had quintupled to 150,000, adding over 500 merchants per day and processing more than $1B in card payments a year. COVID-19 accelerated the transition: Yoco's online payment gateway went live days into South Africa's March 2020 lockdown, and the number of fully-cashless small businesses jumped 300% between March and July 2020. In July 2021 Yoco closed an $83M Series C led by Dragoneer — its first Africa investment after backing Chime, Nubank and Square — joined by Breyer Capital, HOF Capital and 4DX Ventures, with the company setting a goal of one million merchants across Africa and the Middle East within four years.
How it ended up
Still running and expanding. By mid-2026 Disrupt Africa reported Yoco as the preferred payments partner of more than 200,000 South African small businesses, still processing over $1B in card payments a year, with new comps including micro-loans, accounting integrations and Apple Tap to Pay on iPhone.
Background
Yoco was founded in South Africa in 2013 to fix an asymmetry: over 70% of adults held cards and phones, yet almost all small businesses transacted in cash. The reason was merchant-side friction — bank card machines were expensive to rent and hard to qualify for. Yoco's answer was a cheap, app-connected card reader with instant settlement, aimed at the six million small businesses that still operated on cash.
The model compounded: from just over 30,000 merchants after its 2018 Series B, Yoco passed 150,000 by mid-2021, onboarding over 500 per day. COVID-19 supercharged the shift — the online gateway went live days after the March 2020 shutdown, and fully-cashless small businesses jumped 300% between March and July 2020. In July 2021 Yoco raised $83M in a Series C led by Dragoneer, which had backed Chime, Nubank and Square; the round took total funding to $107M.
The bet kept paying off. By 2026 Yoco reported over 200,000 small businesses, processing over $1B in card payments a year, and expanded into micro-loans, online payments, accounting software and Apple Tap to Pay — transforming from a card-reader company into the operating system of South Africa's independent merchants.
What has to be true
- Yoco attacked friction in existing behavior: cards were already everywhere, and a cheap reader with instant settlement closed the gap that held cash-only trade together.
- The reader was a funnel: every terminal became an on-ramp to loans, analytics, and online payments — the higher-margin stack investors were really underwriting.
- COVID-19 stress-tested the thesis: with the online gateway launching as lockdowns hit, fully-cashless small businesses grew 300% in four months — a crisis converted into an accelerant.
- Going bottom-up built a moat: by focusing on the 150,000 smallest merchants, Yoco became the largest payments platform in South Africa without a head-on war with global competitors.
What can be applied
The addressable market isn't card users — it's cash users. Yoco's wedge was a cheaper way to take the existing payment method, and the reader was just the entry point to lending, data, and software.
Aftermath
As of mid-2026 Yoco serves more than 200,000 South African small businesses and still processes over $1B in card payments a year. It has moved beyond card acceptance into loans, online commerce tools and accounting integrations (partnering with local accounting startup stub in June 2026), launched Apple Tap to Pay on iPhone in South Africa, and in May 2026 appointed Carsten Holtkemeyer as CEO, handing the company from founder-led growth to a professional scaling phase. Its original pitch — build the financial stack for the businesses global fintechs ignore — is intact and expanding.
Sources
- South African payments startup Yoco raises $83M Series C backed by Dragoneer
- SA payments startup Yoco raises $83m Series C funding round
- Yoco, stub bring payments and accounting together for SA entrepreneurs
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