A South African company offering small businesses the ability to take mobile card payments has received funding to expand across sub-Saharan Africa, with multinational mobile phone company Orange leading the way.
The African investment arm of French telecommunications giant Orange has announced financing for South African fintech company Yoco.
Launched in 2015, the company provides mobile credit card payment facilities to small businesses and is seeking to expand across sub-Saharan Africa, funding for which has come through a round of finance driven by investment fund Partech, with involvement from Dutch bank FMO, fintech investor Quona Capital and private equity firm Velocity Capital.
Yoco, which has also branched into software, has raised USD 23 million, with some of the funding coming from Orange Digital Ventures Africa (ODVA).
“Payment digitalisation for merchants is a major challenge in Africa where financial inclusion is developing more than ever thanks to innovative solutions,” explained Marc Rennard, chief executive of Orange Digital Ventures, in a statement. He added that the company “is on the lookout for solutions that can lead to genuine revolutions in use, both amongst customers and merchants. This is the case with Yoco”.
The mobile technology corporation launched ODVA in June last year as a USD 50 million fund aimed at funding early-stage innovation projects in Africa, not only in fintech, but in wider online services and the energy and health sectors.
ODVA and made its first investment in April this year, working with the World Bank’s International Finance Corporation (IFC) to provide USD 6.8 million to Kenyan company Africa’s Talking, which provides services to telecoms software developers.
Orange has taken a close interest in Africa and in fintech. It expanded its stake in Egyptian phone network Mobinil in 2015, rebranding it as Orange Egypt the following year. Also in 2016, it set up a compliance centre in Abidjan, aimed at the mobile money market.
Africa has been at the forefront of the development of fintech, as a young population tries to get access to financial services without the traditional infrastructure which banks have in other parts of the world. Mobile payments have taken off through services like M-Pesa and small start-ups are increasingly using blockchain technology to give banking services to communities which have previously not had access to banking.
September 19, 2018