SOUTH African fintech start-up Yoco has announced that it has secured $16 million (R245.6m) in Series B funding at the same time that the country’s economy has gone into technical recession.

The fact that Yoco has secured funding during a difficult economic climate should be celebrated by the South African tech eco-system and is a vote of confidence in the local fintech eco-system.

According to the Global Entrepreneurship Monitor, entrepreneurs cite access to funding as one of their major challenges in starting and running a business.

When Yoco was in search of funding, it was international investors (Velocity Capital Private Equity and Quona Capital) that offered funding for its series A funding.

Yoco is one of the few South African start-ups that has managed to secure funding from international investors. The fintech company was inspired by the challenges experienced by small businesses in accessing payment systems (such as point of sale systems) from traditional banks.

Through Yoco software and devices, the firm has enabled small businesses to have easy access to a payment device and software.

The Series B funding for Yoco has been led by leading venture capital firms in the world. They include Partech, a venture capital firm based in Silicon Valley, Orange Digital Ventures, Dutch Development Bank FMO, South African-based FutureGrowth and existing Series A investors Quona Capital and Velocity Capital.

Yoco will leverage its Series B funding to grow its network of small business merchants, invest in product development, operational scalability and attracting top-tier fintech talent. It brings the company’s total investment to $23m.

The ability for Yoco to attract international investment provides important lessons for South African start-ups on how to access funding. The following are just some of the important lessons offered by the company’s ability to attract funding:

Addressing a need

Yoco has managed to address a real need through technology. Currently only 7 percent of South African small businesses accept card payments, yet South Africa has a card penetration of 75 percent. This fact is a clear indicator that the solution developed by Yoco is necessary for the small business community. Across the African continent there’s a need for similar solutions to enable small businesses.

Build a team

Yoco is made up not only of Katlego Maphai but a team of co-founders and workers who are making the Yoco dream a reality. In the start-up eco-system the norm is to highlight a single founder. Yoco has tried to avoid the founder syndrome by developing a team. Investors in tech eco-systems pay more attention to start-ups that are driven by a team as opposed to a single founder.

Building a community

Yoco serves a community of small businesses in South Africa. Most coffee shops in South Africa use the Yoco technology to enable payments and manage their finances. Yoco has managed to build a community of entrepreneurs that use the Yoco devices and software.

Wesley Diphoko writes about the information economy and innovation. Follow him on Twitter: @WesleyDiphoko