Yoco's CEO Carsten Holtkemeyer put it plainly when his company announced a $100 million credit facility on Monday: "Financing was the one layer we didn't fully control. This facility changes that." The South African fintech has secured the funding from US investment firm Victory Park Capital to bring its merchant cash advance operation fully in-house, giving Yoco direct say over pricing and risk for the first time.
The move deepens a business Yoco has been building since 2018. Through Yoco Capital, the company has advanced more than R6.5 billion (roughly $395 million) to over 40,000 merchants, previously working alongside specialist credit providers. With this facility, described as one of Africa's largest dedicated merchant cash advance facilities, Yoco is placing a bigger bet on its own data and its own balance sheet.
The pitch to small businesses is straightforward. Merchants already using Yoco's card machines or online payment tools don't fill out a loan application. Instead, eligible offers appear directly in the app, calculated from live sales data. Advances run from R2,000 to R1.5 million, with no collateral required, and repayments are deducted automatically from daily takings rather than charged as fixed monthly instalments.
That repayment model is designed to flex with a merchant's revenue, which is a meaningful distinction for businesses where income shifts week to week. Yoco says it has not recorded an unprofitable lending cohort since launch, including through the Covid-19 period, though the company did not share cohort-level figures, default rates, or write-offs alongside the announcement.
Yoco currently serves more than 200,000 businesses across South Africa. The question now is whether its transaction data gives it a real edge in evaluating merchants that traditional lenders typically pass over, and whether that edge holds as the facility scales.
Originally published by TechCabal.