Yoco Technologies has secured a 100 million dollar, or 1.6 billion rand, credit facility from Victory Park Capital Advisors, the Chicago-based private credit manager with about 3.6 billion dollars of assets under management and more than 12 billion dollars invested across 260 deals since 2007. It is Yoco’s first direct entry into the debt market.
The Cape Town company, founded in 2015 and backed by TPG and Dragoneer among investors who have put in more than 150 million dollars of equity, provides card terminals and payment services to 200,000 merchants and says it has processed more than 15 billion dollars of payments. It has previously channelled 6.5 billion rand of merchant financing through partners.
Chief executive Carsten Holtkemeyer said the facility gives Yoco direct control of merchant financing in-house for the first time. Advances will range from 2,000 rand to 1.5 million rand, are pre-approved against live sales data, land instantly and are repaid through automatic deductions from daily sales. Merchants use them for stock, staff, equipment and new branches.
The context is a small business funding gap in South Africa estimated at about 350 billion rand. For a payments company with a decade of transaction data on its borrowers, a private credit facility is cheaper control than another equity round, and it keeps the lending margin inside the company.