YocoA DUTCH tycoon who makes only one or two investments a year has chosen a Cape Town start-up as his first project for 2017. Willem Willemstein, whose fortune funds private equity firm Velocity Capital, says Yoco, which provides card payment terminals for small businesses, can conquer the continent.

Velocity director Allard Luchsinger said yesterday: “We think this is a firm that can become the main financial services company for Africa.”

Yoco, founded by four friends in 2013, unveiled funding from Velocity and US-based Quona Capital which it will use to broaden its national footprint, invest in new products and expand into east and west Africa. The amount was not disclosed. Quona’s investment came from a fund dedicated to good investments that help the poor.

Said Yoco co-founder Monica Brand Engel: “There is a massive opportunity to expand access to, and the quality of, financial services through the digitisation of SME payments and payments data in Africa, where cash still predom-inates in many economies. Since launching its point-of-sale card reader in 2015, Yoco has sold 6 500 devices, 70% of them to small businesses that had not previously been able to offer card sales.

Yoco CEO Katlego Maphai said: “We also digitise their payments data so they have a record of all transactions, and apply business intelligence tools to help them run their businesses better. “We believe enabling card payments is transformative for businesses, and want to be able to do that for SMEs across the continent. This round of funding will enable us to start on that journey.”

Yoco, which logged sales of R1billion through its devices last year, aims to have 100 000 in use within five years, but chief business officer Carl Wazen said the potential market was much larger.

“Up to 350 000 merchants in South Africa accept cards, but there are 1.5 million registered businesses and 3.5 million unregistered. We think the market for Yoco is a million SMEs,” he said.

Luchsinger and Brand Engel said the burgeoning fintech ecosystem in Cape Town had been a critical factor in influencing their investments in Yoco. Fintech angel investor Robby Hilkowitz, who backed the company when it launched, said the investments represented an opportunity for Cape Town to become the fintech hub of Africa.

“Yoco can be the poster child.” Maphai said more institutional investors would be brought on board to fund Yoco’s push into Africa in 2018.

This article was published by The Times on 2 March 2017.