Yoco's 400,000 Merchants Anchor a Push Into African Embedded Finance

Yoco has 400,000 small business customers in South Africa. It processes over $2 billion for them every year [Yoco LinkedIn, Unknown]. The company's trajectory from a simple card terminal provider to a financial services layer for the continent's smallest merchants is a case study in a specific kind of fintech scaling. It starts with hardware, builds a payments graph, and then starts lending against it.

Founded in 2013, Yoco's initial wedge was brutally practical. It offered low-cost, easy-to-onboard card machines to small and micro merchants who were often locked out by traditional banks' high fees and slow processes [Perplexity Sonar Pro Brief, Unknown]. The bet was that this hardware could become the entry point for a much broader relationship. The numbers suggest it worked. The company now serves over 200,000 small businesses across South Africa, many accepting card payments for the first time [Yoco careers site, Unknown].

From Terminal to Capital

The strategic pivot came in 2019 with the launch of Yoco Capital. This merchant cash-advance product is the logical next step for a company that sits on a rich dataset of daily transaction flows. By advancing capital based on a merchant's payment history, Yoco moves from a utility provider to a financial partner. The company reports it has originated over $100 million in merchant cash advances via this division [Perplexity Sonar Pro Brief, Unknown]. More recently, it stated it has disbursed over R3 billion (approximately $160 million) via Yoco Capital [Yoco.com/za/capital, retrieved 2026].

This embedded finance model is the core of Yoco's current valuation story. Investors have backed it with over $170 million in total disclosed funding, including an $83 million Series C led by Dragoneer Investment Group in 2021 [TechCrunch, Jul 2021]. The round history shows a steady climb in conviction and capital.

2018 Series B | 16 | M USD
2021 Series C | 83 | M USD

The Leadership Transition

After more than a decade at the helm, co-founder Katlego Maphai stepped down as CEO in September 2025 [Launch Base Africa, May 2026]. In June 2026, Carsten Höltkemeyer was appointed as the new chief executive [Billionaires.africa, Jun 2026]. This shift from founder-led to externally hired leadership is a common inflection point for venture-scale companies. It often signals a new phase focused on operational rigor, international expansion, or preparing for a public listing.

For Yoco, the timing aligns with its most ambitious growth target yet: reaching one million merchants within four years [MyBroadband, May 2025]. Achieving that goal, from a base of 400,000 today, will require execution beyond its home market.

Where the Wheels Could Come Off

Yoco's model faces several credible pressures. The competitive landscape in South African SME payments is crowded, with players like iKhokha and global giants like SumUp. Expansion into other African and Middle Eastern markets introduces regulatory complexity and local competition. Furthermore, the merchant cash-advance business carries inherent credit risk, especially in volatile economic climates.

The company's answer to these risks appears to be depth over breadth. By layering more services,software, capital, multi-currency support,onto its existing merchant base, it aims to increase loyalty and average revenue per user. Its hardware evolution, from the Yoco Go to the smarter Yoco Neo terminal, is designed to lock in that relationship [CanvasBusinessModel.com, Unknown].

The Next Twelve Months

All eyes will be on the new CEO's first strategic moves. The key milestones to watch are:

• International merchant growth. Concrete numbers from expansions outside South Africa.
• Capital deployment velocity. How quickly the R3 billion disbursed via Yoco Capital grows.
• Funding momentum. The company was reportedly in talks to raise $150 million as recently as March 2022 [Axios, Mar 2022]. A new, larger round to fuel the million-merchant push would be a logical next step.

Yoco's backers include a mix of specialist fintech and emerging market funds like Quona Capital and Partech, alongside growth-stage giants like Dragoneer and Breyer Capital. They have collectively placed a nine-figure bet that the company can own the financial operating system for Africa's small businesses. The $83 million Series C from Dragoneer set a high bar. The question for Höltkemeyer is whether the next chapter justifies a valuation that begins to approach the billion-dollar mark.

Sources

1. [Yoco LinkedIn, Unknown] Yoco Company Page | https://www.linkedin.com/company/yoco
2. [Perplexity Sonar Pro Brief, Unknown] Yoco Company Brief
3. [Yoco careers site, Unknown] Yoco Careers Page
4. [Yoco.com/za/capital, retrieved 2026] Yoco Capital Page
5. [TechCrunch, Jul 2021] South African payments startup Yoco raises $83M Series C backed by Dragoneer | https://techcrunch.com/2021/07/27/south-african-payments-startup-yoco-raises-83m-series-c-led-by-dragoneer/
6. [Launch Base Africa, May 2026] Article on Yoco CEO transition | https://launchbase.africa
7. [Billionaires.africa, Jun 2026] Article on Carsten Höltkemeyer appointment | https://billionaires.africa
8. [MyBroadband, May 2025] Yoco profile and growth targets
9. [Axios, Mar 2022] Scoop: South African fintech Yoco in talks to raise $150 million | https://www.axios.com/2022/03/07/south-african-fintech-yoco
10. [CanvasBusinessModel.com, Unknown] Brief History of Yoco | https://canvasbusinessmodel.com/blogs/brief-history/yoco-brief-history