Yellow Card, a leading crypto platform founded in the U.S. but operating across Africa, recently secured $33 million in Series C funding. This investment, led by Blockchain Capital, adds to the company’s total funding, bringing it to at least $88 million. Blockchain Capital is a seasoned venture capital firm, with prior investments in Coinbase, Kraken, OpenSea, and Worldcoin. Yellow Card’s strategic pivot has caught the attention of several other key investors, including Polychain Capital, Block, Inc., Winklevoss Capital, Third Prime Ventures, Castle Island Ventures, Galaxy Ventures, Blockchain Coinvestors, and Hutt Capital.
The purpose of this capital injection is multifaceted. It will allow Yellow Card to strengthen its product offerings, particularly its stablecoin on-and-off ramp, improve its API suite, and continue expanding its team and systems. The company’s current focus is on supporting businesses rather than retail customers, a shift driven by the higher volume and profitability of business transactions. The funds will also be directed towards further engagement with regulators across Africa, an essential aspect of navigating the crypto space, which remains largely unregulated or ambiguously regulated in many parts of the world. Yellow Card’s revenue, which has surged sevenfold since January 2023, demonstrates the growing demand for stablecoins in Africa as a hedge against volatile local currencies and inflation.
Why the Investors Invested
Blockchain Capital and the other investors saw the opportunity in Yellow Card’s strategic positioning within Africa’s crypto ecosystem. One key reason for their investment lies in the rising demand for stablecoins across the continent. African countries face significant currency volatility, and stablecoins like USDT and USDC offer a reliable means for businesses to manage treasury and cross-border trade. This utility-driven demand for stablecoins, rather than speculative trading, is a solid growth factor for Yellow Card, which saw its transaction volumes soar from $1.7 billion in early 2023 to over $3 billion. This financial performance validated investor confidence in the company’s growth trajectory.
Yellow Card’s pivot towards serving businesses rather than retail customers also aligns with market realities. Retail operations, with their smaller volumes and higher costs associated with compliance (e.g., KYC and chain analysis screening), presented sustainability challenges. By contrast, business transactions involve larger volumes and more substantial fees, making them a more profitable target market. This pivot, combined with the broader adoption of stablecoins for essential goods like food, pharmaceuticals, and consumer products, further underscores Yellow Card’s practical utility, a key draw for investors.
Lastly, the company’s ability to engage constructively with regulators in Africa has set it apart from global counterparts like Binance and Coinbase, which face more adversarial regulatory environments. Investors likely view Yellow Card’s proactive stance on regulation as a safeguard against future operational disruptions. The favorable regulatory frameworks in countries like Nigeria, South Africa, and Ghana, where sandbox environments and clear licensing guidelines are being introduced, provide further assurance of the company’s long-term viability.
A Look at Yellow Card
Founded in 2019 in Nigeria by Chris Maurice and Justin Poiroux, Yellow Card is now Africa’s most-funded cryptocurrency exchange. Its operations span 20 African countries, providing access to stablecoins like USDT, USDC, and PYUSD, which are crucial for managing currency risk in highly volatile markets. The startup initially targeted retail customers, but by 2021, it had grown to over 1 million users and shifted its focus to businesses.
Yellow Card now works with approximately 30,000 businesses, offering them stablecoin-based payment and treasury management solutions. Its core products include a stablecoin on-and-off ramp and an API suite that integrates Africa’s banking and mobile money infrastructure, making it accessible to global companies such as Coinbase and Block. The company’s platform has become essential for businesses seeking to manage cross-border payments efficiently.
In addition to its financial success, Yellow Card has established itself as a leader in navigating Africa’s crypto regulatory landscape. Maurice and the team have worked closely with regulators in several African countries, promoting innovative frameworks that allow for the sustainable growth of crypto services on the continent. As a result, Yellow Card has emerged as a major player in Africa’s digital financial ecosystem, poised to benefit from the growing demand for crypto and blockchain solutions across the continent.