[Transcript] #63: Yoco - How the South African FinTech is scaling Point-of-Sale and other payment solutions to merchants across Africa
Transcript for podcast originally recorded on April 14, 2023
In Apr 2023, we explored the story of Yoco. Yoco is a South African fintech company that provides small businesses with tools to accept card payments, manage sales, and access capital. Founded in 2013, Yoco launched its first card reader in 2015 and quickly gained traction by serving underserved merchants. It offers point-of-sale hardware, software, and online payment solutions, helping over 200,000 merchants across South Africa. Yoco generates revenue through hardware sales, payment processing fees, and software subscriptions.
Companies discussed: Yoco, Square, Flutterwave, PayFast, PayThru, PayU, DPO, Flutterwave, Paystack, Stripe, Ikhokha, MTN, Safaricom, Zapper, Visa, Interswitch, Nedbank, ABSA, FNB (First National Bank South Africa) & Wave
Business concepts discussed: Merchants solutions, Points-of-Sale devices, SME Lending & hardware and software bundling
Enjoy!
Olumide Ogunsanwo
Personal: Website
Afrobility Podcast: Stories and analyses of African technology companies (Website, Listen: Apple podcasts, Spotify & Google podcasts & Read: Substack Newsletter)
Adamantium Fund: African B2B fund focused on education, health, finance, food and transportation (Website & memo)
Firedom Book: Financial Independence stories of African Immigrants (Website, Substack Newsletter & Buy: Print, eBook or Audiobook)
Transcript starts here
[00:00:00] Olumide Ogunsanwo: Today we're going to talk about Yoco, the South African point of sale, FinTech company. We'll explore the Yoco story across the following areas: (1) South African payments context, (2) Yoco's early history, (3) its product and monetization strategy, (4) its competitive positioning and potential exit options, and finally, (5) our overall outlook. This episode was recorded on April 9th, 2023. We are back.
[00:00:23] Bankole Makanju: We are back. Like we never left. It's been a long time, man.
[00:00:25] Olumide Ogunsanwo: It's been a long time. I was looking at our former Afrobility episodes and it looks like we moved to a monthly cadence, but we've not. It's just a matter of bad luck, but we're here.
[00:00:34] Bankole Makanju: Life keeps happening. But we're back. Today we're gonna discuss Yoco. Yes, I'm pumped.
[00:00:37] Olumide Ogunsanwo: In simple English, Yoco is a South African FinTech POS provider point-of-sale provider that enables merchants to more easily collect payments. It sounds straightforward.
[00:00:48] Bankole Makanju: Yes, they offer tools and services to help small businesses get paid, run their businesses better and grow. They offer card payment acceptance, software driven business tools, and working capital.
[00:00:58] Olumide Ogunsanwo: Think about them like Square. If you're an American, think about them like the Square card reader, aka now Block. Yoco used to enable South African businesses to collect in-person payments through the card reader, but now they've expanded to a little bit of online payments, lending and a little bit of business management tools.
[00:01:17] Bankole Makanju: There's a good number of similar companies.
[00:01:23] Olumide Ogunsanwo: But Yoco is unique because they have raised a lot of money. Estimating between $150M-$180M in 9-10 years. That's a lot of money.