The man who led Yoco from start-up to a R12-billion payments giant

Katlego Maphai is one of the four co-founders of the South African fintech startup, Yoco, which has accumulated over 400,000 merchants and hopes to breach the one million mark within four years.

Maphai currently serves as CEO at Yoco and has done so since co-founding the company in 2013. He founded the company with three friends: Bradley Wattrus, Lungisa Matshoba, and Carl Wazen.

Since its launch, Yoco has emerged as one of South Africa’s most successful fintech startups and has significantly transformed the landscape for small and micro-enterprises in the country.

The company has an estimated valuation of $700 million (R12.5 billion).

Maphai’s entrepreneurial drive was ignited while still at school when he travelled with his parents to Palo Alto, California, home to Silicon Valley.

He said Silicon Valley’s open thinking made an impression on him, prompting him to pursue a business science degree majoring in information systems at the University of Cape Town.

Maphai started at the University of Cape Town and was awarded his Bachelor of Business Science degree in 2005.

“I felt immediately with information systems that I was getting the best of both worlds — technology and business,” he told the university in an interview.

He said his time studying information systems helped him develop what he considers to be his primary strength — understanding context and deconstructing complex endeavours into smaller, simpler, interconnected pieces.

During his studies, Maphai’s most significant learning experience was the Group Systems Development Project in his third and fourth years.

In a team of five students, he helped build an end-to-end software solution for an external business.

“I learnt some of my greatest lessons about teamwork, planning, execution, problem-solving, stakeholder management and being thorough during the year-long course,” he said.

While completing his studies, Maphai interned at PricewaterhouseCoopers, supporting large ICT and business process engagements.

After completing his studies, he landed a job at Accenture, where he worked as a consultant in the communications and high-tech industry practice, before moving into a strategic role.

“I was involved in multiple consulting engagements, predominantly focused on Mobile Banking and Mobile Content,” said Maphai.

“I developed many of my tactical, detailed planning, and execution skills in this environment.”

A shift to telecoms

Maphai worked at Accenture from 2006 to 2008, before shifting to a consultancy role at telecoms advisory firm Delta Partners.

He joined Delta Partners in September 2008, working on several pan-African and Middle Eastern advisory engagements.

These varied from mobile operator startups and product development to turnaround and transformation engagements, customer value development, broadband operations, and customer experience.

He was also involved in the roll-out of 3G in Zimbabwe and the launch of a mobile operator in West Africa.

Maphai was with Delta Partners for roughly three-and-a-half years, leaving the firm in April 2012.

In May 2012, he joined Rocket Internet GmbH, where he assisted in expanding the company’s operations and market reach beyond just Germany.

He was part of the core senior startup team that successfully started Jumia Nigeria, a thriving online retailer.

However, Maphai didn’t stay with Rocket Internet GmbH for long, leaving the company in November 2012 and moving on to work on Yoco from January 2013.

Maphai and his co-founders got the idea for Yoco after seeing the business model work in the US through Square, a payments system founded by Jack Dorsey, Jim McKelvey, and Tristan O’Tierney.

“I was back in San Francisco again in 2012, saw the product really proliferating, but it wasn’t until an old childhood friend took me into this hole-in-the-wall barbeque eatery,” he told Rand Merchant Bank.

While at the restaurant, he saw no point-of-sale or tills on the countertop, and was shocked when the waitress asked his friend how he wanted to pay, assuming it was a cash-only place.

“She took out this old Android device, stuck in this white little dongle that could read cards, took his card, and swiped it,” Maphai recalled.

“Small business, good product, nothing much else. Now, this lady was able to accept digital payments.”

Working with friends

Maphai said an important goal of his was his desire to work with friends.

“I wanted to work with my friends. That was very important for me. You spend a lot of time at the office, and must be close to the people you work with. It gives a lot of meaning,” he told Mashstartup.

“We’re certainly connected by this common ideal that we just want to see a better world. We don’t speak about it in long, fluffy terms, but we feel it’s a burning thing, my business partners and I.”

Maphai met Yoco commercial director Carl Wazen during his stint at Delta Partners.

“Living in Dubai at the time, and working in tough Saudi Arabia, Carl and I made a pact while on holiday with friends in Cape Town to eventually move there and start a venture,” he said.

“It was a special way to decide to come back home.”

However, before that could come to fruition, Maphai had a stint at Rocket Internet where he met and worked with Yoco’s risk and compliance director, Bradley Wattrus.

After wrapping up at Rocket Internet, he approached childhood friend Lungisa “Lungi” Matshoba, who currently serves as Yoco’s technology and product director, to join the team.

The team began the search for a business model, with one of the brainstormed ideas being an interactive wine bar. However, they settled on point-of-sale payments.

“More than 27 million people in South Africa have bank cards, yet only 6% of sellers accept cards,” he said in his interview with the University of Cape Town in 2016.

“We realised there was a huge gap for small businesses who need to sell the products and services.”

The team persevered and succeeded despite the challenges and timeframes associated with registering such a business.

“Seeing our first transaction in October 2014 was incredibly special and the culmination of two years of hard work,” said Maphai.