Nearly three years after raising Series B funding, Cape Town-based fintech startup Yoco is believed to have attracted a new investor in what could be a part of a much larger Series C round.
Yoco has pulled in the Uncovered Fund, a Japanese venture capital fund aimed at African ventures, as a new investor, The Capital Quest has learnt.
However, the Uncovered Fund is an early-stage fund that has a maximum ticket size of $500,000. Given that Yoco is a relatively mature firm and has earlier raised mid-stage VC funding round, it is likely to be raising a larger Series C funding with participation of few small but new investors to square up the round.
An email query to Uncovered Fund did not elicit any response. A Yoco spokesperson said: “We don’t unfortunately have anything meaningful to share at this point.”
Yoco was founded in 2015 by Katlego Maphai (CEO), Carl Wazen (CBO), Lungisa Matshoba (CTO) and Bradley Wattrus (CFO).
The venture has three products. Its core product is a point-of-sales (PoS) system with card readers. It also offers online payment solutions including a payment gateway and merchant apps to help them manage and track sales, as also a lending solution.
It had raised a Series B round of $16 million in September 2018. That round was led by Partech with participation from Orange Digital Ventures and Dutch investor FMO. Its Series A investors Quona Capital and Velocity Capital had also contributed in the Series B round.
As per the company’s website, about 140,000 South African businesses use its payment services. Three years ago, it had said it had over 27,000 such clients.
The firm has over 200 employees and claims to be processing about $1 billion in payments annually.
Given its previous funding round and how fintech has become a red-hot space for funding, a likely Series C round could easily be $50-100 million in size.
Earlier this year, Nigerian fintech Flutterwave became the first pure African unicorn when it scooped up $170 million in its Series C round. Flutterwave, a payments technology venture had previously raised $35 million in its Series B just a year ago.
Last month, cross-border fintech Chipper Cash raised $100 million to likely enter the haloed unicorn club.
Meanwhile, another Africa-anchored fintech firm OPay, which is backed by Chinese investors, is reportedly in talks to complete a much bigger $400 million round at a $1.5 billion valuation.