African cryptocurrency exchange Yellow Card has garnered more than $15 million in Series A funding, making this the largest funding round for a digital currency trading platform situated on the continent.
Yellow Card Gets a Lot of New Funds
The money was raised with the help of Valar Ventures, Third Prime, and Castle Island Ventures. Companies like Square, Coinbase Ventures and Blockchain.com Ventures also contributed funds to the growing business.
The company has its roots in the year 2013 when Chris Maurice and Justin Poiroux – two executives with the firm – made roughly $40,000 while selling BTC on eBay. During that year, bitcoin was not trading for the price it’s enjoying today. To earn profit, both men sold their BTC at a 100 percent markup. All things were going well until they began getting hit with credit card chargebacks.
From there, they switched things up to avoid accepting credit cards directly in the future so they could prevent such problems. It was this decision that led to the establishment of Yellow Card.
Initially, Yellow Card did not start out as a legitimate exchange. Rather, it was a small business in which both men met with potential bitcoin buyers at local restaurants and similar locations where they would engage in in-person transactions. Maurice explained in an interview:
We decided we wanted to do something more scalable, and the idea was we would put gift cards in Walmart, CVS, etc., where anyone could walk in, buy the gift card and redeem it for crypto.
Things took an interesting turn when he was approached by a man living in Alabama who was trying to send money home to his family in Nigeria. Initially, the man had tried sending cash home through a standard bank, and the institution sought to charge him $90 just to send $200. Maurice said:
I talked to the guy, ‘Hey, have you heard of bitcoin? It’s free, instant, fun, and all this great stuff,’ but I went home and just kept thinking about his mom. I was envisioning this elderly woman in Nigeria who probably hardly knows how to use the internet with $200 in bitcoin on her phone. All I could think is this doesn’t solve anything for anyone.
This ultimately led to a major interest for Maurice in Nigeria. He sought to learn more about its monetary system and how its remittance structure worked. He then discovered a crypto enthusiast named Munachi Ogueke on LinkedIn. Ogueke, from Nigeria, is now the chief BTC officer with the firm.
Africa Is Becoming a Major BTC Hotspot
In a statement, he comments:
Yellow Card is a very diverse product. In different countries, we have slightly different modus operandi, but at the end of the day, the focus is still the same. We are bringing access to people that don’t have access to crypto and financial systems.