Not all businesses start with an idea. Some come about because of a meeting of minds – a group of friends on the same wavelength wanting to work together. Add a lightbulb moment of seeing something work overseas that you knew could work here – only better. This is how the founders of Yoco came together – one of a group of friends seeing a sidewalk food vendor using her cellphone to accept payments and they decided to better it, offering an easy to use, affordable mobile point of sale for small businesses in South Africa. Here’s the story.

Can you tell us a bit more about Yoco

Katlego: Yoco is Point-of-Sale Payments venture that is reducing the complexity in processing payments for small and medium-sized businesses (SMEs) in South Africa. Its integrated card payment and point-of-sale system enables SMEs to securely accept card payments at the store or on the go. Yoco offers a free point-of-sale app that works with a choice of two mobile card readers that connect to a phone or tablet and transform it into a card acceptance terminal. The system gives merchants access to extensive business intelligence, enabling SMEs to run their business better.

Our vision is to make it easier to do business. We do this by developing smart technology, applying insights and delivering radical simplicity. Our gift is delightful commerce.

Beyond the well packaged, simple to use technology, we solve a key problem of access. We are able to onboard a business within four days from sign up, a first for South Africa. Emerging entrepreneurs and young businesses looking to get access to a card service quickly, see this as valuable.

What sort of audience are you targeting?

Katlego: Our target segments are small and young businesses. In South Africa, it has traditionally been difficult to get a card terminal as a small and/or young business. The traditional card terminal fees are prohibitive for smaller businesses and the institutions place a lot of weight on trading history and steady transaction revenues to assess risk. Many of these businesses have to wait weeks to get a card terminal from a traditional bank.

yoco cardpayment startup

In addition to solving the problem of access, we provide these small businesses with a basic point of sale and business analytics dashboard. A young business can easily find itself working off paper to track sales. Our well-packaged and integrated solution allows them to move to a digital cloud based platform with no extra cost.

What makes Yoco unique?

Katlego: Yoco’s system is designed for businesses that want to accept card payments quickly and simply. Because Yoco runs from a phone or tablet, a business only needs a device and an Internet connection. SMEs no longer need to go through a lengthy application process and complicated equipment, installation and training to manage payments and point-of-sale. Merchants can sign up for Yoco online and receive their card reader in less than 4 days – a first for merchants in South Africa.

We built Yoco around the customer journey, retrofitting the operations and technology to support this and not the other way around. We feel unique in the market for our level of customer centricity. Every aspect of the product, features, and elements of the design is focused on giving the merchant the best customer experience and enabling them to use Yoco without any help or support.

I think what has made Yoco so special is that we built more than what was required. We could have built an MVP. What is an MVP in payments? That the transaction works half of the time because you are in beta? We did not see this as an option, building a reliable payments platform from the start. We also decided to go beyond payments too in version one, whilst most of our competitors built a product that only does payment. Deciding to explore the needs of the market in a holistic way, we released a bigger feature set, received early feedback and expanded the expectations merchants had of us.

How long have you been working on this project?

Katlego: This coming November will mark three years in the venture. We started looking at this closely in late 2012 in Cape Town. At the time, it was only me, Carl and Bradley. Lungisa officially joined the founding team in early 2013 when we incorporated. We moved to Johannesburg in 2013, to spend a year securing a License from our partner bank to process payments as a third party.

Post license, initial seed funding was received, and the founders moved back to Cape Town to set up the office and hire the initial team. 2014 was all about building the product and incubating. In October 2014, we kicked off our beta programme, after receiving certifications from Visa and MasterCard.

What makes you passionate about this project and where did the idea for it originate?

Katlego: The possibilities are endless for what we can do through our platform and how we can enable small businesses like never before in emerging economies.

We knew we wanted to work together and went exploring for a business model hat attracted us. We went through a range of business ideas, including a wine bar. In the end, we settled on Point of Sale payments. I first saw Square in 2011, during an annual visit to San Francisco. A year later I saw it everywhere. The lightbulb moment or propagation of the seed was seeing an African American lady running a run-down eatery, with great BBQ, take a payment for a $40 basket size. The lad processed the transaction on a low-end Android phone with ease. All of a sudden, I started to picture it back home in South Africa and the impact it could have for sellers. Later in 2012 various opportunities in the bourgeoning space availed themselves and we jumped in head-first.

Carl: The problem and market are large. These are real-life problems that are impacting millions of small businesses around the world today. The problems we are solving from a product and access standpoint, are intellectually stimulating and continuously changing. I founded this business with my friends and got to collaborate with them on many levels, every day.

It also helps that I can do that from Cape Town, an extremely beautiful city with a vibrant, creative scene.

The idea came when I was discussing with Katlego what Square had enabled in the US and how the use-case could work well for South Africa, albeit with modifications. We were subsequently asked by a European Mobile POS player to help them grow in Africa. Those discussions did not lead to anywhere tangible, but it got us started in the industry.

Bradley: Doing business should be as easy as possible but small businesses do not have access to the tools they need to setup and manage their businesses. I am excited about what we are doing at Yoco to make it simpler for businesses to get set up, accept payments and gain insight into their sales.

We discussed it for a while and were exposed to the technology through other international startups who were going to market with swipe and sign solutions at the time. We then realised the largest barrier for small businesses was not the technology alone, but also getting access to a card acceptance solution. This for me was what made this business opportunity most interesting for us.

Lungisa: My passion for this business comes largely from the impact that I believe we can have on the lives of our customers. Yoco is the sort of business that can really and truly change the daily experiences of small business owners in a profound and impactful manner, for me that is exciting.

Tell us about your personal backgrounds. How did you all come from studying or working to running this business?

Katlego: I have a background in Telecoms Media and Technology (TMT) management consulting and venture incubation.

I studied Business Science at the University of Cape Town, majoring in MIS. I randomly reconnected with childhood acquaintance Lungisa while standing in a faculty registration queue.

I joined the technology and consulting firm Accenture after graduating in 2005, working in the Communications & Hi-Tech practice. I later went on to join TMT Advisory firm Delta Partners. Working in the Middle East and Africa region, my projects involved mobile operator and new product launches, operations improvement and customer experience strategy. I also met Carl for the first time at Delta Partners. We worked together on a re-launch project in South Africa for one of the mobile network carriers focusing on customer experience.

In late 2011 and living in Dubai at the time, I was ready for something more entrepreneurial and also wanting to move back home. Carl and I made a pact in January 2012 while on vacation with friends to move to Cape Town and start a venture. I left Delta Partners in April 2012, Carl shortly after. Looking for a soft landing into entrepreneurship and Cape Town, I joined the newly formed Rocket Internet team in Cape Town.

At Rocket Internet, I met Bradley. We were part of the core incubation team that set up in Nigeria, now the largest e-Tailer in Africa. We spent a few months in Nigeria pulling this up. Nigeria provided for a grueling and humbling entrepreneurial experience, something that snapped me out of the 5-star management consulting lifestyle and one that prepared me for the next years.

After completing my incubation work at Jumia, I was ready to return to Cape Town and take a much-needed sabbatical to think about my venture idea.

Carl: I was relatively disinterested in school or university. As a child, I was two years ahead of my grade and ended up graduating from the American University of Beirut with a business degree at age 19. But back then, all I wanted to do was play music, I had a scholarship to study to become a professional drummer in London. For all intents and purposes, that was the plan. While in London, I was persuaded by my grandfather to do an internship in finance just to get some exposure to the industry. After a two-month internship in asset management in the heart of London, I realised that being a musician would limit my possibilities and that is when I decided to explore a career in investment banking.

Yoco payment process startup founders

Yoco Founders (from left to right): Bradley, Katlego, Carl, Lungisa

I landed a job at Citigroup investment bank in Dubai, I was twenty. After a short year at Citi, I joined a young Telecoms, Media and Technology (TMT) consultancy called Delta Partners, I was employee number ten and helped it grow to a global firm of 200. Delta gave me a solid foundation in analytical thinking and strategy. I worked in the advisory and investment side of the business, travelling a lot.

At the time, I had entrepreneurial ambitions but I did not feel ready to start my own business. I was not ready to take the leap. I felt I needed more money to quit and do that comfortably. I saw self-funding as the only route, especially at the beginning.

In 2009, I was sent to South Africa on a project, where I met Katlego, who worked for Delta Partners in Johannesburg. We became friends and worked very well together. We had a combination of strategy and operations that just worked. This work relationship would be what inspired us to eventually start a business together.

After a few more years of consulting work across Africa, I felt unfulfilled. Helping large corporates was not exactly how I wanted to spend my energy in my late twenties. Katlego and I decided to quit and move to Cape Town. We realised the timing would have never been “right” so we just had to do it. Cape Town happened to be the place we both wanted to be in. It was a great way to access the African opportunity and offered an unparalleled quality of life.

We started exploring different business models from a wine bar to an apparel brand. The opportunity to do something in tech was always exciting but not the priority at the time. We wanted to keep busy and challenge ourselves creatively. I always thought that for me to do something in tech, it had to be a large and exciting opportunity, otherwise I wouldn’t bother.

The opportunity for Yoco followed shortly afterwards. It had all the elements that I was looking for to sink my teeth into. I felt ready!

Bradley: I studied Actuarial Science at the University of Witwatersrand (Wits) in Johannesburg. I thoroughly enjoyed my studies but when leaving university found traditional risk management career options limiting for myself. I always had an interest in entrepreneurship and joined the Allan Gray Orbis Foundation at University where I continued doing small business side-projects and learning about entrepreneurship.

After university, I worked in Strategy Consulting at Monitor Group for just over a year which gave me a good foundation in structured problem solving and taught me how to communicate in business. I envisioned starting my own venture later in my career, but when the opportunity to join Rocket Internet and set up an e-tailer in Nigeria came up I decided to take the leap. It was at Rocket Internet that I met Katlego

Lungisa: I studied a Computer Science and Business degree at the University of Cape Town. At the end of my degree, I decided to co-found a mobile VoIP venture called Yeigo. We built a mobile application with instant messaging and VoIP in 2005, this was before the iPhone, before Android and before the App stores. Yeigo raised a million dollars in angel funding and while in the end it, like many of its competitors, was too early in the space, we managed to find a strategic investor in a Swiss VoIP provider called Telfree in 2008.

After the partial acquisition, I stayed on with Telfree and used the technologies and know-how we had developed at Yeigo to bolster the Telfree offering. I exited Yeigo fully in 2012 and was beginning to get bored of my break when Katlego approached me to become the fourth member of the founding team.

And a bit more about your childhood backgrounds? Did any of you come from entrepreneurial families?

Katlego: I think what all four of us have in common during our childhoods was always having to adapt and trying to make the best of our context, flirting with the tangents of societal circles.

I am a proper middle child. I have two older brothers and one younger sister. My brothers are six and seven years older than me respectively. My younger sister is three years younger and has cerebral palsy. I developed a strong bond with her from a young age and I suppose had early exposure to someone being dependent on me.

I moved around a lot through academic parents. It took me from Soweto to Cape Town, Cambridge, Princeton, Palo Alto, Pretoria and eventually back to Cape Town. My exposure to Palo Alto and the open thinking Silicon Valley at such a young age stayed with me, ultimately leading to where I am now, I believe. The transition back from free-thinking middle school Palo Alto to post-apartheid South Africa and relatively conservative Catholic school in Pretoria was not easy.

It was during this time that I started grappling with the concept of an institution and how traditional structures naturally eroded individuality. These thoughts amplified during University, where original ideas or new ways to approach problems were not encouraged in my opinion.

Carl: I was born in London to Lebanese parents and spent my childhood between London and Beirut.

I grew up in a tightly-nit family of entrepreneurs. It‘s given me drive and sense of possibility My grandfather, Subhy Hakim was a refugee at age 25 following conflicts in his country but despite that managed to build a global shipping and bunker trading company that extended from Japan to the UK to Panama. He failed multiple times and rebuilt. He then supported his children and his grandchildren in all their endeavors unconditionally. He is a published author and a poet. He still works at the age of ninety-two and has unshakable positivity and energy. He is one of those rare humans that one comes across maybe once in two or three generations.

My mother is another major inspiration in my life. She gave her undivided attention to her children. Every waking moment spent with her children, and still she somehow managed to build two successful businesses. My father and his father before him were also entrepreneurs.

Taking risks and working super hard was the norm in my family (and for many Lebanese families). Multiple failures were also the norm. However, everyone helped the other, and in the end we make it out alive. We were privileged but took nothing for granted. I take these values with me wherever I go, and family remains the most important thing for me.

Bradley: Both my parents work in technology and always encouraged us to get into entrepreneurial projects. We never received an allowance, but could always get capital for our business ideas. We were also encouraged to get actively involved in leadership at school and take initiative on issues we felt strongly about.

Lungisa: I grew up with a strong desire to live in the creative space. My first passions were music, art and chess. I think in many ways that shaped a lot of who I am today. Growing up, I would dream of designing cars and inventing all sorts of things, including robots that could do my homework.

From the first time I touched a computer I realised that programming was an art. It became apparent to me that this art could be used to solve problems and shape the world around me. I also started dabbling in business from a very early age. My first business, which I started before high school, printed business cards. From there, I set up a business that sold computers, in addition to one that produced branded clothing.

Can you remember any event that happened in the past that inspired you to start the venture?

Katlego: I was on a large multimillion dollar, multi-workstream third generation mobile network roll-out in Zimbabwe for my consulting firm Delta Partners. With the encouragement of a boss who allowed me to run the programme my simple way, we achieved incredible results in terms of timely roll-out and fast uptake. I experienced an important moment, for the first time I clearly saw that doing things in my unique way and style, could yield incredible results. I believe this made everything else that followed possible.

Bradley: Having first-hand experience, as part of the core team that launched a venture like, gave me the confidence and resolution to setup something on my own.

Lungisa: While not a single event, a realisation that I had some years ago has largely shaped what I have brought to this business and how it has impacted the direction that we have taken.

When I first ventured into business software, I was struck by the sheer number of people in the sector who believed that SMEs and even more so, SMEs in Africa did not require quality services or products. The view being that if you give them anything, even if it barely works, it would be enough given how little access they have.

I rejected this notion almost implicitly! I believed that they deserved better service and product than that sort of thinking could produce. I am strongly driven to disprove that sort of thinking and in so doing improve the level of services and products sold to this segment of the market.

What was the most exciting moment for you since starting this project?

Katlego: Doing our first merchant delivery and subsequently seeing their first transaction on 17 October 2014 was incredibly special for me. It was the culmination of two years of hard work and dedication all summed up into a moment.

Carl: Every time a merchant or customer gets their ‘aha’ moment after they’ve used our product for the first time. It is always special to see. Also, seeing our merchants grow with us is always inspiring.

I also get a special kind of pleasure when we lose a customer to a competitor because they were cheaper, only to see them return to us because we are better.

Bradley: Whenever I use the Yoco product at one of our customers it inspires me to continue doing what we are doing. Seeing our vision becoming a reality is really rewarding. Before starting Yoco, being a part of and seeing how quickly we could put together a business in Lagos also made me realise what was possible.

Lungisa: The start of our beta programme last year, in October 2014. We decided to involve the full team in the deliveries and activation of our first merchants. I found it exciting as a product developer and software engineer to be hand delivering a product I helped to build.

Delivering our early beta, and having it just work, having a merchant’s businesses improve, and watching how they responded to something that, until that point, had just been an idea was amazing.

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What about the toughest moment?

Katlego: Nine months into the venture, after committing time and bootstrapping, we were still not sure whether we were going to get a license to operate. The license we needed was unique and pioneering in South Africa for a venture like ours, but essential to the long-term viability of our business model. The days before getting the preliminary go-ahead were the darkest because self-doubt started to creep in, with thoughts about how we were crazy to think we could get such a license as new entrants to the industry.

Carl: Startups are hard. I had my share of health, mental and emotional troubles over the last two years. Not something I would like to revisit anytime soon. One becomes better at coping, and that is what makes great entrepreneurs.

Bradley: There were many tough times over the past three years in setting up Yoco. Like Katlego mentioned, one of the toughest was making it through the first year. I was working small side jobs to pay my bills while we worked to get a license to allow merchants to accept card payments. There was not a good chance that we would get it; that year tested our commitment to the venture.

Finally, what would the one bit of advice be for someone considering starting their own business?

Katlego: “Find something you are passionate about and don’t save any energy for the swim back to shore” – You have to go all in, 100% is usually not even enough. Also, ideas are unlimited and always attainable; a great team and execution are not. Focus on the people and execution, the rest will sort itself out.

Carl: When times get very difficult, ask yourself if you are truly solving a big problem and if customers truly want your product. If the above two are true, you should keep going. It will take more time and more money than you think, most of the time. However, you should never give up if you and your customers both believe in what you are building.

I also advise that founders deepen their knowledge of the legal and financial disciplines of fundraising. Not having those skills can cost a startup a lot in its early days.

Bradley: Prepare for the long-term but stay focused on the short-term. It can be a tough trade-off between getting through the current challenges while not losing sight of your future vision.

Lungisa: Grit your teeth, ready your mind, it is going to be a bumpy ride! Don’t close your eyes because every moment will either be a great story to tell in success, or a powerful learning that you will need when you do it all again.