Yellow Card, a Pan-African bitcoin exchange with operations in 12 countries throughout the continent, has secured Series A round of funding led by Valar Ventures, Third Prime, and Castle Island Ventures. This is the continent’s largest funding for a B2C crypto exchange. Square, Coinbase Ventures, and Blockchain.com Ventures were among the investors in the round. Third Prime was appointed to the crypto company’s board of directors as a result of the latest investment.
“This raise is a validation that Africa has a major place in the crypto industry,” said Yellow Card’s Chief Bitcoin Officer, Munachi Ogueke. “With the access that Yellow Card brings, powered by this raise, we can now let crypto proliferate and be a reliable enabler for people across the continent.”
The new $15 million capital will be used to expand the crypto exchange’s personnel, develop new products, and expand into more African countries.
Why The Investors Invested
The investors in this round have a lot of faith in Yellow Card since, while being a cryptocurrency company, it has also received regulatory licenses from regulators. However, following the Central Bank of Nigeria’s decision to prohibit financial institutions in the country from interacting with crypto exchanges, its operations in Nigeria, which it paired with an agency banking model, were terminated.
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“Yellow Card has licensing that allows us to operate in six countries, and we’re hoping to add another one very soon,” said Chris Maurice, Yellow Card’s CEO. “On top of that, we are also registered with the financial intelligence authority, financial conduct authority or any other applicable government bodies for things like anti-money laundering reporting.”
For Valar Ventures, crypto is the future of finance in Africa.
“Many African countries adopted mobile phones without ever distributing landlines at scale, and many African countries adopted mobile payments without ever distributing credit and debit cards at scale,” said James Fitzgerald, a founding partner at Valar Ventures said. “We see a similar opportunity for crypto; it can enable Africans to leapfrog an entire generation of financial services technology.”
Jack Dorsey, whose company Square also invested in this round, has long been a proponent of bitcoin, with his companies Twitter and Square actively incorporating the cryptocurrency into their platforms. On September 23, Twitter revealed that users can now tip their favorite creators with bitcoin. In 2019, Dorsey traveled to a few African countries, where he learnt more about the continent’s burgeoning digital environment. “Africa will define the future (especially the bitcoin one!)” he tweeted at the end of his African visit.
A Look At What The Startup Does
Founded in 2016 by Chris Maurice and Justin Poiroux, Yellow Card started with an intent to create a Bitcoin gift card. Then, in 2018, Chris and Justin met a man at a Wells Fargo who was trying to send $200 dollars to his family in Nigeria. The bank charged him $90. They teamed up with Munachi Ogueke to undertake the mission of bringing Bitcoin to Africa with the objective of “basic financial services for all” and have since taken Nigeria by storm with 35,000+ merchants and over $35 million dollars in transactions as at 2020.
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Yellow Card launched in Nigeria in 2019 using the original bitcoin gift card model. It eventually shifted to a crypto-based agency banking firm, which could have been great for the man who sent $200 home. The distribution of vital financial services to customers through a network of third-party agents, known as agency banking or agent banking, has been critical in the quest for financial inclusion in Nigeria and many other African countries.
Looking ahead, the company’s ultimate goal is to become a crypto service that allows Africans to send remittances, make payments, and preserve the value of their wealth from the constant depreciation of their currencies in many African countries. This is something that a lot of cryptocurrency sites already do. Yellow Card, on the other hand, seeks to set itself apart by developing products that do not require consumers to be crypto experts.
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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