Natural historian Sir David Attenborough has joined Instagram to stress the need to save the planet — while breaking a world record in the…
The event saw Maphai cover a wide variety of topics, including the formation of Yoco, challenges associated with the company and more. So what did we learn?
Working on Jumia gave him the required confidence
Maphai said that while working at RocketInternet, he was sent (along with current Yoco CFO Bradley Wattrus) to Nigeria to work on online retailer Jumia.
“That was a gruelling experience… really tough… And I think after that, him [Wattrus – ed] and I just had crazy ambition,” he explained. The Yoco co-founder said that “if we can help pull up a venture of this scale so quickly in Nigeria, there’s actually nothing else we can’t do”.
Finding the problem to the solution
Figuring out the problem you want to solve is important for any startup — Yoco was no different.
“Initially, we thought we were solving a technology problem… then we thought we’re solving a cost problem, but then we realised we’re solving an access problem,” Maphai elaborated.
“It was prohibitively hard for a small business to get access to a card machine,” Maphai said, realising that they needed to be in control of the “on-boarding” process [without the approval of a bank – ed] to effect a change.
Getting a payment facilitating license was a “chicken and egg” situation
“We needed to raise capital, but we didn’t have a banking license. And in order to get a banking license we needed capital,” he explained.
Maphai said that in their first meeting with the bank, they had a card reader with them.
“A lot of ventures have been going to see the bank, saying we’re gonna do mPOS [mobile point of sale – ed]. But nobody had a card reader in their hands, right? And we literally got one of the first readers in the country. And once we had the reader, we were able to set up the meeting and the bank took us seriously, even though we really had nothing else.”
Failed pitches helped in a big way
The Yoco co-founder said that failed pitches meant for a better pitch at the end of the day.
The rejections meant that, once emotions had settled, they could go back and improve criticised aspects of their pitch. “All those pitches got us to the point where we had such a bulletproof pitch, we could answer every question because we’d been through such a long process.”
Katlego Maphai of Yoco dished out knowledge on a variety of topics, from fintech trends to perfecting a pitch
Maphai also gave another piece of advice for pitches.
“When you’re looking at investors… have this list, right? And start from… worst to best… So by the time you’re getting to the best, you’ve got a rock solid pitch and you’ve received all the blows, and you’re ready for any question.”
Who says you absolutely need VC?
Maphai said that a “scary moment” was when their VC pulled out, just as they got an initial indication for their license.
“But a scary moment was just as we got the license, or the initial indication, the VC pulled out… And then, something interesting happened. We just sat down and we asked ourselves ‘when last had our partner bank asked about our investors?’ It was a big question at the beginning, but after they had gone through this due diligence process with us, they stopped asking about our backers and were actually just concerned with us.”
This led Maphai to question whether they could get a deal with angel investors alone.
“That was the biggest blessing in disguise that happened to Yoco. Because in the end, we had a set of angels, 80% of the funding from abroad, 20% locally. But just emotionally invested in the business, and I can’t stress how important this is.”
The Yoco co-founder added that the angel investors always encouraged them.
What about bad investors?
Maphai expanded on investment, giving some pretty interesting advice for entrepreneurs.
“I don’t say this lightly… Rather shut down your business than take on a bad investor. It’s not worth it, it really isn’t… You’re dying a slow death and you’re wasting your time.”
Expect another investment announcement soon
The co-founder said that Yoco would be announcing another investment soon.
“Now we’re about to make another transition… we’re about to take on some institutional capital. We’ll be announcing that, probably early next month.”
Key figures for the service
A big question was just how popular the service was, with Maphai producing some figures.
“Last year, we processed half a billion rand on the platform… Which was really exciting… We now have 6000 merchants on our platform,” he said.
Interestingly enough, he also revealed that Yoco is targeting 100 000 merchants across Africa in five years.
Expect these fintech trends
The Yoco co-founder said the SME lending space is set to be the biggest trend.
“You also have the payment stuff, the Snapscans, the Zappers… but beyond that… you have some players starting to get into the Blockchain space.”
What about Yoco’s approach to staff?
The startup takes a different approach to the traditional corporate world.
“If I look at my personal experience… I’ve seen both sides of it. On the one side, you’re being pushed to your intellectual limit. And that’s phenomenal, because all of a sudden, you start seeing this capacity that you have,” Maphai explains. “But on the other side, the biggest thing that I picked up on was… this lack of consideration and intelligence around putting people in a position to succeed.”
The co-founder adds that he treats the team like adults and decided to “not have arrival times and leave times”, while also assuming that everyone was a top performer.
You have to know your startup’s stage
Maphai also stressed the importance of knowing what stage your business is at,
“We were convinced we were at Series A stage and we communicated this within the company and we set all these expectations and we weren’t at the stage and… all of a sudden, you have to deal with those expectations with our staff. And that was really tough, you felt like you were letting people down.”
He added that they’re now going through another stage.
“We have to be aware of this [the stage – ed] and really understand what that means and just really crystalise that…”
His first use of Yoco?
Of course, it’s only right for a chef to taste their own creations, so an audience member asked when Maphai first used Yoco.
“The first transaction I done, was at Lady Bonin, which was one of our first merchants.”