Cape Town – South African fintech company Yoco has secured a $100 million (approximately R1.6 billion) credit facility from US-based investment firm Victory Park Capital to expand funding for small businesses across the country.
The deal, announced on Monday, November 9, marks the first time Yoco has entered the debt market directly and will allow the company to provide working capital and cash advances to merchants using its payments platform.
According to Bloomberg, the funding will enable the Cape Town-based fintech, which is backed by private equity giant TPG, to bring more of its merchant financing operations in-house.
Yoco chief executive Carsten Höltkemeyer said the arrangement would give the company greater control over financing its merchant network.
“The deal will for the first time give Yoco direct control over the financing needs for our merchants at scale and in-house,” Höltkemeyer said.
Persistent challenges
The advances will range from R2,000 to R1.5 million, with businesses expected to use the funding to purchase stock, hire additional employees, upgrade equipment and open new branches.
According to Victory Park Capital, Yoco has already distributed more than R6.5 billion in working capital to over 40,000 merchants through financing partners since launching its merchant funding service in 2018.
The new facility will allow Yoco Capital, its embedded financing division, to expand its reach and provide funding based on merchants’ live sales data.
Businesses using the platform can be pre-approved for advances without submitting conventional loan applications or providing collateral. Repayments are automatically deducted from daily sales, rather than being structured around fixed monthly instalments.
The development comes amid persistent challenges facing small businesses seeking access to finance.
International investor interest
South Africa’s small business financing gap is estimated at approximately R350 billion, according to the 2025 Finfind and African Bank MSME Access to Finance Report, with smaller enterprises continuing to struggle to secure funding through traditional banking channels.
Victory Park Capital, which manages approximately $3.6 billion in assets, has invested more than $12 billion across about 260 investments since 2007.
Yoco, founded in 2015, serves approximately 200,000 merchants and has processed more than $15 billion in payments, according to Bloomberg.
The transaction underscores growing international investor interest in South Africa’s fintech sector, particularly businesses developing alternative financing solutions for small and independent enterprises.
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Compiled by Betha Madhomu
