South Africa’s Biggest Bitcoin Exchange VALR Raises $3.4 Million From India-based VC Firm 100X Ventures

VALR, South Africa’s largest bitcoin exchange has just secured ZAR57 million (US$3.4 million) in Series A funding round to enable it launch new products and make entry into additional markets.

Farzam Ehsani, VALR’s CEO and co-founder
Farzam Ehsani, VALR’s CEO and co-founder

“I am very grateful that despite the challenging global COVID-19 pandemic that has adversely affected many businesses around the world, VALR has been able to grow at a phenomenal pace and we’ve been able to raise funds and partner with a set of world-class investors, adding to our already distinguished group of shareholders,” said Farzam Ehsani, VALR’s CEO and co-founder.

Here Is What You Need To Know

  • The latest funding round was led by 100x Ventures, the investment arm of 100x Group. Also participating is local VC firm 4Di Capital, as well as previous investors Bittrex and Jordaan.
  • With the new funding, VALR will build new products and services, expand into new territories, as well as continue to build its team of professionals, particularly in the technology, regulatory and compliance, and client service domains.
  • VALR had in 2019, raised US$1.5 million in a funding round led by the US-based Bittrex and former FNB chief executive officer (CEO) Michael Jordaan’s Montegray Capital, to assist the launch of its digital asset trading platform. 

Why The Investors Invested

This is the first commitment of the India-based 100x Ventures into an African entity. The VC invests in at least 100 startups every twelve months. Its traditional ticket sizes range between INR 2.5 million ($33k) to 10 million ($133k) per startup using India SAFE Notes, standing for India Simple Agreement for Future Equity, a convertible instrument that an investor [iSafe note holder] gets in return for making a cash investment in a startup. The VC emphasizes that it mostly backs startups based on their founding teams; market size opportunity; business model strength; unfair advantage; moat; conviction of a minimum 20X returns.

Arthur Hayes, CEO and co-founder of 100x Group, said South Africa had an “incredibly exciting and fast-growing” cryptocurrency ecosystem, and that he believes VALR is well-placed to capitalise on future growth of bitcoin trading.

“In VALR, we’re backing not only a successful early-stage business, but a management team with the ability to scale operations significantly,” he said.

“VALR has shown great integrity and leadership coupled with impressive growth, and delivers a mature, institutional grade offering to the local market,” Justin Stanford, co-founding general partner at 4Di Capital said. 

“This is becoming a necessary component in all markets the world over, as the crypto asset ecosystem becomes increasingly more accepted and integrated into the global financial system.”

Standford further said his company had been looking for an appropriate investment in the cryptocurrency sector for some years, and was “delighted” to be backing what he described as “such a high quality business and management team”.

Read also: Using Bitcoin To Provide Electricity South Africa’s Solar Startup Sun Exchange Raises 3 Million

A Look At What VALR Does

Co-founded in 2018 by former blockchain lead at Rand Merchant Bank Farzam Ehsani, VALR.com is a digital asset trading platform where you can buy, sell, store and transfer cryptocurrencies seamlessly and securely. It offers one of the widest selections of digital assets. 

The exchange has over 40,000 customers and has seen over 13,000 bitcoin traded over the last month. 

“Our goal is to usher in a new financial paradigm that makes financial services available to the public with pricing that is fair and transparent, and with an experience that is intuitive and seamless,” says CEO Farzam Ehsani, CEO

Ehsani’s journey into the tech world started with his attending primary and secondary school in Kenya, and then UC Berkeley in California.

His adventure into the blockchain scene started when he was tasked to help set up RMB’s Fintech Unit in January 2016, after “asking many questions to the bank’s leadership about Bitcoin and blockchain technology”.

“At the time no one had heard of the term ‘blockchain’, and everyone associated Bitcoin with drugs and the dark net,” he said.

After leading the blockchain work at the bank for over two years, he realized there was a “limited appetite” for banks to enter the cryptocurrency space.

“I then left to start VALR with my co-founders,” Ehsani said in an interview. 

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer