MICROCAPITAL BRIEF: Point-of-sale Service Provider Yoco of South Africa Raises $16m in Equity from Accion Frontier Inclusion Fund, FMO, Paratech

Yoco, a South African point-of-sale payment enabler, recently raised USD 16 million through its Series B funding round, which was led by US-based venture capital firm Paratech. While the amount invested by each participant has not been disclosed, the Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), a development bank controlled by the Dutch government, and the Accion Frontier Inclusion Fund (AFIF), which is sponsored by US-based NGO Accion, committed a total of USD 1.7 million. Yoco plans to use its fresh cash to “grow its network of small business merchants, invest in product development, and to attract top-tier fintech [financial technology] talent.”

Since its founding in 2015, Yoco has focused on helping small businesses accept card payments. As of 2018, the company provides approximately 27,000 small and medium-sized enterprises with card readers and point-of-sale software. Three quarters of its customers had not accepted payment cards before working with Yoco.

FMO, established in the Netherlands in 1970, is 49-percent owned by private-sector organizations. The bank’s vision is to help abolish extreme poverty, increase equality and support measures that reduce climate change. For 2017, FMO reports pre-tax earnings of EUR 292 million (USD 350 million) from operations in approximately 70 countries. As of the end of that year, the organization had total assets of EUR 8.3 billion (USD 10 billion) including EUR 3.3 billion (USD 4 billion) in investments outstanding to financial institutions.

AFIF has USD 141 million in commitments “from institutional investors and invests in companies that innovate to expand access to financial services to underserved consumers and businesses in emerging markets.” The fund is managed by Quona Capital, which has offices in India and the US.

Accion, the primary funder of AFIF, seeks to alleviate poverty by offering services such as microenterprise loans and business training. It was founded in 1961 and issued its first microloan in 1973 in Brazil. Accion’s partner microfinance institutions (MFIs) provide loans to entrepreneurs through 64 MFIs in 32 countries in Africa, the Americas and Asia. As of December 2017, Accion has USD 375 million in total assets.

By Michelle Fleming, Research Associate

Sources and Additional Resources

FMO Participates in USD 16 million Funding Round for South African Point of Sale Payment Provider Yoco
https://www.fmo.nl/news-detail/d0a0a113-4b8e-4c15-bfcb-5fe9a5386f87/fmo-participates-in-usd-16-million-funding-round-for-south-african-point-of-sale-payments-provider-yoco

Tech Crunch: South Africa’s Yoco raises $16 million to boost digital services to small businesses
https://techcrunch.com/2018/09/06/south-africas-yoco-raises-16-million-to-boost-digital-services-to-small-businesses/

Yoco website
https://www.yoco.co.za/

Accion website
https://www.accion.org/

AFIF background
https://www.accion.org/frontier

Quona Capital website
http://quona.com/

MICROCAPITAL BRIEF: FMO Extending $450k Convertible Grant to Kenyan Fintech Firm Lendable
https://www.microcapital.org/microcapital-brief-fmo-extending-450k-convertible-grant-to-kenyan-fintech-firm-lendable/

MICROCAPITAL BRIEF: India’s RBL Bank Completes Ownership of Microfinance Institution (MFI) Swadhaar Finserve with Equity Purchases from Accion, Individual Investors
https://www.microcapital.org/microcapital-brief-indias-rbl-bank-completes-ownership-of-microfinance-institution-mfi-swadhaar-finserve-with-equity-purchases-from-accion-individual-investors/

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