After Raising $40 Million, African Bitcoin Exchange Yellow Card Seeks ‘Unicorn Status By End Of 2023’
Yellow Card’s leadership team
Pan-African cryptocurrency exchange Yellow Card Financial has announced closing $40 million in Series B financing to fund its growth plans. This comes just a year after the blockchain startup announced its Series A financing.
- Blockchain venture capital firm Polychain Capital led the round. Other participants include Castle Island, DG Daiwa Ventures, Fabric Ventures, Sozo Venture, Third Prime, The Raba Partnership and Valar Ventures.
- Yellow Card has now raised $57 million in total, making it one of the most-funded Web3 startups in Africa. A few other well-funded cryptocurrency startups on the continent include South Africa’s Valr ($54.9 million in total), Congo-based Jambo Technology ($37.5 million in total) and Nigeria’s Mara ($23).
- “Yellow Card is the best executing team on the continent. We are impressed by the way they seamlessly adjust and adapt to the unique opportunities and demands of the various African markets. We’ve barely touched the surface of what is possible when it comes to crypto in Africa, and we’re excited for what’s to come,” said Will Wolf, Partner at Polychain Capital.
- The company declined to disclose its current valuation. However, CEO Chris Maurice said: “we are aiming for Unicorn status by end of 2023.”
- Since closing its $15 million Series A in 2021, Yellow Card expanded its operation to four additional African countries — taking its total service coverage to 16 markets across the continent.
- It also made some notable executive hires, including the addition of Chief Financial Officer Alice Tomdio, General Counsel Craig Stoehr and Micha Katz as its chief information security officer.
- Before joining Yellow Card, Tomdio spent nearly two years as head of finance at Stripe-owned African payments company Paystack. Tomdio joined Paystack from PricewaterhouseCoopers, or PwC, where she had spent 10 years.
“Our team has done a great job of growing quickly across a notoriously difficult continent to expand across,” said Maurice. “We’ve done a great job of working in different markets and establishing a good local presence on the ground.”
When Yellow Card announced its Series A funding in 2021, Maurice’s said, “the big picture is to change the way that money moves around the continent using crypto.” While the message hasn’t changed, things have evolved.
Flush with fresh capital, the crypto company now intends to expand into new markets by setting up shops in more African countries and offering ways for people to get more out of their crypto assets, according to Maurice.
“When we talk about new markets, of course, we still want to be in all 54 countries on the continent—that’s still the goal, but when we talk about new markets, we’re talking about offering more [ways] for people to [use] their crypto—offering more basic financial services that people can access,” he said. “For example, we already launched Yellow Pay and, essentially, what that does is it makes it easy for people to send money between any of the countries that we support using crypto.”
Yellow Card is also pursuing strategic partnerships to meet its expansion objectives, with Maurice saying that the company has already secured some yet-to-be-announced partnerships.
“We’re looking to work with, not just crypto exchanges, but any company that is doing anything within the broad financial sector on the continent — whether it’s sending money to Africa, whether that’s moving money around the continent,” he said. “We’re pursuing B2B partnerships that allow other companies to use our rails to make things significantly easier for their users on the continent.”
While Yellow Card’s focus on remittance, payments and savings products align with what most experts would regard as cryptocurrency’s strengths, the lack of regulatory clarity in many African continues to impede the industry’s ability to solve these problems at scale.
Yellow Card’s aim has always been to build products that plug into a country’s financial system in the way people typically interact. For instance, in countries where mobile money reigns supreme, the company’s goal is to build rails that allow people to get in and out of crypto using mobile money. That is an uphill task when the traditional financial system is unyielding.
When asked about the challenges of plugging natively into local financial systems across Africa, Maurice unreservedly said it’s been “very” challenging.
“It’s really a challenge, at its core, to be able to plug in natively to these financial systems because, as you know, crypto is still not widely accepted as part of the broader financial system.”
But Maurice is optimistic that the regulatory situation across the continent is set to change, citing his participation in a recent Eastern and Southern African Anti Money Laundering Group event in Livingstone, Zambia.
“I can tell you that regulators across the continent are starting to come across to the fact that crypto is here to stay, and it’s the job of regulation to encourage this innovation while at the same time making it safer,” he said.
In August, the South African Reserve Bank (SARB) encouraged local banks to offer banking services to crypto companies, stating that denial of service “may pose a threat to [the country’s] financial integrity.”