Leading crypto-payment startup in Africa, Yellow Card, has said it will actively pursue regulatory approval in Nigeria following its $33 million fundraising. Regional Manager, West Africa, Uzoma James, disclosed this in an exclusive chat with Technext.
The Nigerian crypto space has long been locked in a regulatory chokehold with the government wielding the long stick against individuals and companies operating in the space. This led to many of them leaving the country or continuing their operations without approval, risking clampdown and prosecution.
Recently, the Securities and Exchange Commission (SEC) began the process of regulating the space. This it intended to do by granting an “Approval-in-Principle” under the Accelerated Regulatory Incubation Program (ARIP) and a models and technology testing program called the Regulatory Incubation (RI) Program.
Following this, two crypto companies, Quidax and Busha were granted approvals in principles under the ARIP. And it appears Yellow Card has a strong focus in becoming next as the regional manager told Technext that the company would be looking to increase its participation in the Nigerian ecosystem.
“With the Nigerian government easing restrictions on the crypto space, it makes sense that Yellow Card would look to get more involved. We’re definitely looking to increase our participation in the ecosystem. For one, we would actively pursue regulatory approval to operate as a licensed business in Nigeria. This would enhance our credibility and allow us to offer more comprehensive services,” Uzoma James said.
She also noted that the combination of regulatory clarity and investment would lead to a more dynamic presence in Nigeria’s evolving crypto landscape.
Regulatory issues are not peculiar to Nigeria alone as they have also characterized the crypto and blockchain space of Africa. Thus, attracting investments at such perilous times is not only difficult, but also points towards the confidence of investors backing the startups to brave the torrid times.
And for Yellow Card, the fundraising round is a strong vote of confidence from its backers, proving that they believe in the company’s vision and its ability to navigate the regulatory challenges in the crypto and blockchain space in Africa.
“Given the complexities of regulations across different countries, having the support of investors who trust us to tackle these issues is incredibly reassuring. It motivates us to push forward and work even harder to ensure that we not only comply with regulations but also set a standard for others in the industry. We’re committed to being a responsible player in this space, and this support reinforces our determination to succeed despite the hurdles we face,” she said.
Yellow Card to deepen its presence after $33m raise
Last week, Yellow Card announced that it has closed a significant Series C round. The round was led by Blockchain Capital and supported by Polychain Capital, Third Prime Ventures, Castle Island Ventures, Block Inc., Galaxy Ventures, Blockchain Coinvestors, Hutt Capital and Winklevoss Capital.
Speaking with Technext, the regional manager said the recent investment strengthens the company’s position as a major player in the African crypto space.
“This recent investment really strengthens Yellow Card’s position as a significant player in the blockchain financial space, particularly in Africa. It allows us to enhance our services and expand our reach, which is crucial as we aim to provide accessible financial solutions,” Uzoma said.
She also noted that with the funding, the company can invest in technology and infrastructure, and making its platform more robust and user-friendly. She said it also opens up opportunities for them to explore new products and services that can better serve the customers.
Uzoma also said the company will be looking to increase partnerships and drive educational initiatives using online initiatives such as Yellow Card Academy. The company will also be initiating community engagement by increasing outreach efforts to build a community around its platform while promoting financial literacy.
Speaking on its recent focus of facilitating cross-border payments and its expansion plans, the regional manager said the focus is really exciting, especially with the new funding they have secured.
“We see a huge need for easy and affordable ways to send money across Africa, and we want to be at the forefront of that. One of our main goals would be to develop better payment solutions particularly through enhancing Yellow Card’s API and widget products,” she said.
The company which currently operates in 20 African countries said it plans to grow and expand into more African countries.
Yellow Card has now raised a total funding of $85 million with a valuation of around $200 million. While this is still a long way from unicorn status, the expected growth of the space as regulatory hurdles are removed means a run for the $1 billion valuation mark may be on the horizon.
While Uzoma admitted that the potential for becoming a unicorn is super exciting, she noted that the company is more focused on building a solid, sustainable business right now.
“For us, the goal isn’t just about hitting a specific valuation; it’s about making sure we’re really meeting the needs of our users and making a positive impact. If we keep doing that and grow our services thoughtfully, I believe we’ll get there in time. So, while we’re ambitious and have our sights set on becoming a unicorn, we want to let things happen naturally. Success will come from staying true to our mission and delivering real value to our community,” she said.
Founded in 2019, Yellow Card has since grown and established strong presence in 20 markets across Africa. It currently has over 260 employees, the majority residing in Africa and a highly diverse workforce with 45 per cent of employees being women. The company prides itself in that the team speaks over 25 languages. Since inception, the fintech has completed $3 billion in transactions.
See also: Startup funding: African startups raised $600m in Q3, a steep rise despite global slump