After Raising $40 Million, African Bitcoin Exchange Yellow Card Seeks “Unicorn Status by End of 2023”

Pan-African cryptocurrency exchange Yellow Card Financial has announced to close $40 million in Series B funding to fund its growth plans. This comes just a year after the blockchain startup announced its Series A funding.

Vital detail

• 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, 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 total), Congo-based Jambo Technology ($37.5 million total) and Nigeria’s Mara ($23).
• “Yellow Card is the best performing team on the continent. We are impressed with the way they seamlessly adjust and adapt to the unique opportunities and demands of the different African markets. We have barely touched the surface of what is possible when it comes to crypto in Africa, and we are excited about what is to come, says 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 the end of 2023.”
• Since closing its $15 million Series A in 2021, Yellow Card has expanded its operations to four more 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 chief information security officer.
• Before joining Yellow Card, Tomdio spent nearly two years as CFO 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 have done a good 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 said, “the big picture is to change the way 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 shop in several African countries and offering ways for people to get more out of 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’ve already launched Yellow Pay, and what it really does is make it easy for people to send money between all the countries we support using crypto.”

Yellow Card is also pursuing strategic partnerships to meet its expansion goals, and Maurice says the company has already secured some yet-to-be-announced partnerships.

“We’re looking to work with, not just crypto exchanges, but any company doing anything within the broad financial sector on the continent — whether it’s sending money to Africa, whether it’s moving money around the continent,” he said. “We are pursuing B2B partnerships that allow other companies to use our skins to make things significantly easier for users on the continent.”

While Yellow Card’s focus on remittances, payments and savings products aligns with what most experts would consider cryptocurrency’s strengths, the lack of regulatory clarity in many African countries continues to hinder the industry’s ability to address these issues at scale.

Yellow Card’s goal has always been to build products that plug into a country’s financial system in the way people typically interact. For example, in countries where mobile money reigns supreme, the company aims to build rails that allow people to get in and out of crypto using mobile money. It’s an uphill task when the traditional financial system is unyielding.

Asked about the challenges of tapping into local financial systems across Africa, Maurice bluntly said it has been “very” challenging.

“It’s really a challenge, at its core, to be able to plug into 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 landscape across the continent is changing, 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 figure out that crypto is here to stay, and it’s the job of regulation to encourage that innovation while making it safer,” he said.

In August, the South African Reserve Bank (SARB) urged local banks to offer banking services to crypto companies, stating that denial of service “could pose a threat to [the country’s] financial integrity.”