Yellow Card raises $33M to boost its B2B expansion

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Africa’s blockchain and crypto sector is getting a crucial boost amid challenging times for startups, many of which have scaled back operations or shut down due to regulatory challenge, macroeconomics factors, or mismanagement. Below is how Yellow Card raises $33M from Blockchain Capital to boost its B2B expansion.

This boost comes from Yellow Card, a U.S based crypto platform launched in Nigeria in 2019, which has become the most well- funded cryptocurrency exchange on the continent. The company announced that it has secured $33 million in Series C funding, led by the established venture firm Blochchain Capital, known for it investment in Coinbase, Kraken, OpenSea, and, more recently, Worldcoin. This latest round bring Yellow Card’s total funding to at least $88 million.

Blockchain capital invested in Yellow card, which has shifted focus from retail customers to business clients. Basically, Yellow Card offered crypto and stablecoins to retail users in 20 African countries. The Co-finder Chris Maurice said the company realized businesses benefits more than their services.

After reaching 1 million customers in 2021, Yellow Card found it more costly in serving small retail users. All customers undergo screening to handle larger transactions and pay higher fees.

In order to address this issue, Yellow Card increased it minimum transaction amount, aiming to attract more business clients. Maurice further explained that the company’s identity has changed from a cryptocurrency exchange to a stablecoin on/off ramp, fitting better with how businesses use their services for managing treasury and stablecoins.

Yellow Card is Pivoting to Focus Exclusively on Businesses

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Here is how Yellow Card raises $33M from Blockchain Capital to boost its B2B expansion.

Currently, Yellow Card serves around 30,000 businesses across Africa and beyond, assisting them with payments and treasury management, mainly using stablecoins.

While Yellow Card’s shift towards businesses may seems like a departure from its initial goal of making crypto accessible to everyone, co-founder Chris Maurice insists that the company is still committed to that mission, just in a different way.

He also emphasized that the individual and small business in Africa often overlap, just like a small kiosk owner. This means that Yellow Card’s client includes everyone from local traders selling imported goods to major corporations. “The blending of business and personal use in the region creates a unique dynamic, making our services relevant to both sectors,” said by Maurice.

The company believes that helping businesses can actually benefits individuals more than if they actually used the technology directly. Example is when a company use Yellow Card for managing their finances, it helps lower the costs of essential items like food and medicine. This make these goods more affordable and accessible to everyone, even if they are not using crypto themselves.

In Sub-Saharan Africa, crypto usage is low-less than 3% of global transactions from July 2023 to 2024. However, the region has strong reasons to use crypto, especially compared to the West. Nigeria ranks second in the world for crypto adoption, and some African countries like South Africa, Ethiopia, and Kenya are among the top 30 countries that adopt crypto in the world.

Stablecoins, these are crypto currencies tied to the value of the U.S. dollar, are particularly useful in Africa. Many African nations face unstable local currencies and struggle to access dollar ($). Stablecoins like USDT and USDC provide a way for businesses and consumers to protect their money from inflation and currency fluctuations, making it easier to make international payment and trade across borders.

The Role of Stablecoins in Boosting Adoption

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Maurice notes that the demand for stablecoins and the technology from businesses handling larger transactions have led to a significant increase in Yellow Card’s transaction volume, rising from $1.7B early last year to over $3B. Consequently, the company’s revenue has grown sevenfold since January 2023, now reaching eight figures.

“What drive our adoption is primarily utility. Stablecoins are essential. People need them,” the CEO stated. “They address real problems for both individual and businesses. This technology is being adopted out of necessity, not speculation; it serves a practical purpose.”

Yellow Card offers two key products: These are its core on and off ramp services and an API suite, which Maurice humorously calls “Africa-as-a-service.” The API suite connects Africa’s banking and mobile money systems, making them available to global companies like Coinbase and Block, and enables these firms to utilize Yellow Card’s infrastructure for customers transactions across the world.

The future of payments is in fast, affordable system for everyone, supported by open networks.” Said by Aleks Larsen, the general Partner at Blockchain Capital. “We are thrilled to support Yellow Card as they integrate Africa into the blockchain using stablecoins.”

Yellow card, which have claimed to be the Africa’s largest and first licensed stablecoin on/off ramp platform, noted that several investors participated in the Series C round, including Polychain Capital, Block, Inc., Winklevoss Capital, Third Prime Ventures, castle Island Ventures, Galaxy ventures, Blockchain Coinvestors, and Hutt Capital.

The company also stated that this funding will enable it to develop new products, and enhance it team and systems, and maintain it leadership in regulatory engagement across the continent.

Regulations of Yellow Card raises $33M to boost its B2B expansion

Regulations presents a significant challenge for crypto platforms worldwide. Companied like Binance and Coinbase are currently facing lawsuits for allegedly offering unregistered securities in the U.S. In addition, crypto remains heavily restricted in certain countries like china, where mining and exchanges ar4e really facing crackdowns.

In a separate issue, the conflict between Binance and Nigeria, where authorities have detained Binance executive, Tigran Gambaryan for good eight (8) months over the claims that the platform undermined the local currency, highlight the need for crypto companies to maintain dialogue with regulators.

Also, Maurice argues that African regulators are often more innovative and have a better grasp of cryptocurrency technology tan their counterparts in other regions. He also points at the recent licensing guidelines in Nigeria, frameworks in South Africa, Botswana, Tanzania, and Zambia, and the establishment of a sandbox environment in Ghana as an evidence.

“Our goal is to continue to see and develop a clear regulatory framework worldwide. Africa has always gotten an unfair reputation in terms of the regulations. In more sense, it is frequently a more crypto friendly environment than the U.S. right now,” Maurice stated.

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