Pan-African cryptocurrency exchange Yellow Card Financial has announced the closing of $40 million Series B funding to fund its growth plans. This comes just one year after the blockchain startup announced its Series A funding.
- Blockchain venture capital firm Polychain Capital led the round. Other participants include Castle Island, DJ Daiwa Ventures, Fabric Ventures, Suzo Ventures, 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. There are a few other well-funded crypto startups on the continent, including South Africa’s Valr ($54.9 million total), Congo-based Jambo Technology ($37.5 million total), and Nigeria’s Mara ($23).
- “Yellow Card is the best executing team on the continent. We are impressed by the way they are seamlessly adapting and adapting to the unique opportunities and requirements of various African markets. We have barely touched the surface of what is possible when it comes to cryptocurrencies in Africa,” said Will Wolff, Partner at Polychain Capital. And we’re excited about what’s to come.”
- The company declined to disclose its current assessment. However, CEO Chris Morris said: “We aim to have a unicorn in place by the end of 2023.”
- Since its $15 million Series A shutdown in 2021, YC has expanded its operations to four additional African countries – bringing its total service coverage to 16 markets across the continent.
- She has also made some notable executive appointments, including adding Chief Financial Officer Alice Tomdio, General Counsel Craig Steuer and Misha Katz as Chief Information Security Officer.
- Prior to joining Yellow Card, Tomdio spent nearly two years as Chief Financial Officer at Stripe-owned African payments company Paystack. Tomdio joined Paystack from PricewaterhouseCoopers, or PwC, where she spent 10 years.
“Our team has done a fantastic job growing rapidly across a continent that is notoriously difficult to expand into,” Morris said. “We have done a great job working in different markets and establishing a good local presence on the ground.”
When Yellow Card announced its Series A funding in 2021, Morris said, “The big picture is to change the way money moves across the continent with crypto.” While the message hasn’t changed, things have evolved.
The crypto company, filled with fresh capital, now intends to expand into new markets by setting up stores in more African countries and offering people ways to take more advantage of their crypto assets, according to Morris.
“When we’re talking about new markets, of course, we still want to be in all 54 countries on the continent – and that’s still the goal, but when we’re talking about new markets, we’re talking about offering more. [ways] for people [use] Their crypto-currencies provide more basic financial services that people can access. “For example, we have already launched Yellow Pay, and what that basically does is it makes it easy for people to send money between any of the countries we support with crypto.”
Yellow Card is also seeking strategic partnerships to achieve its expansion goals, with Morris saying the company has already secured some yet-to-be-announced partnerships.
“We look forward to working with, not just cryptocurrency exchanges, but any company that does anything within the continent’s broad financial sector – whether it’s sending money to Africa, whether it’s moving money across the continent,” he said. “We are pursuing B2B partnerships that allow other companies to use our bars to make things much easier for their users on the continent.”
While Yellow Card’s focus on remittances, payments and savings products aligns with what most experts see as the strengths of cryptocurrency, the lack of regulatory clarity in many African countries continues to hamper the industry’s ability to solve these problems at scale.
Yellow Card’s goal has always been to build products that enter the country’s financial system the way people normally interact. For example, in countries where mobile money is prevalent, the company’s goal is to build railways that allow people to get in and out of cryptocurrency using mobile money. This is a daunting task when the traditional financial system is stubborn.
When asked about the challenges of local integration into local financial systems across Africa, Morris said unreservedly that it was a “huge” challenge.
“It’s really challenging, in essence, to be able to connect locally to these financial systems because, you know, crypto is still not widely accepted as part of the broader financial system.”
But Morris is optimistic that the regulatory situation across the continent is about to change, noting his participation in a recent event for the Eastern and Southern Africa Anti-Money Laundering Group in Livingstone, Zambia.
“I can tell you that regulators across the continent are starting to realize that cryptocurrency is here to stay, and the mission of regulation is to encourage this innovation while making it more secure,” he said.
In August, the South African Reserve Bank (SARB) Encourage local banks To provide banking services to crypto companies, noting that denial of service “may pose a threat to [the country’s] Financial Integrity.
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