Fintech platform Yellow Card has raised almost R600m to expand its stablecoin operation in a further sign of the growth of blockchain associated businesses.
Blockchain-based technologies and applications are gaining traction in Africa’s finance ecosystem, with authorities granting more licences for their use, while adoption from mainstream finance institutions is growing too.
The technology, which powers cryptocurrencies such as bitcoin, has until recently been regarded as fringe and associated with finance scams. But it has since gained market recognition, driven in part by large fund managers such as BlackRock.
A stablecoin is a type of cryptocurrency designed to maintain a stable value by pegging it to another asset, such as real world fiat currency. The most common peg is the dollar, and examples include USD Coin and Tether. The other main peg for stablecoins is commodities such as gold or oil.
On Thursday, Yellow Card, the largest and first licensed Stablecoin on/off ramp in Africa, announced the closing of its series C funding round with $33m (R585.21m) invested, led by crypto investor Blockchain Capital.
Polychain Capital, Third Prime Ventures, Castle Island Ventures, Block Inc., Galaxy Ventures, Blockchain Coinvestors, Hutt Capital, and Winklevoss Capital also participated in the funding round.
Yellow Card, which operates in SA, said the latest financing “marks a significant milestone for the company and the African fintech industry as a whole, as it validates the vision and progress for stablecoins on the continent and practical applications for the technology worldwide”.
Yellow Card provides customers and businesses across 20 countries with secure and cheap methods to buy and sell some stablecoins via their local currency, directly and through its payments platform.
The new capital will be used to fund growth and expansion, particularly by enhancing Yellow Card’s application programming interface and widget products. These are the gateways for international businesses, including Coinbase and Block to tap into African markets and for African companies to make international payments and manage their treasury via stablecoins.
Yellow Card is also developing products for the continent, hiring more people, adding to its systems, and continuing to talk to regulators.
“This fund raising not only demonstrates our resilience, but also highlights the vital role of digital assets for businesses across Africa,” Yellow Card CEO and founder Chris Maurice said.
“We are excited about the opportunities, partnerships, and journey ahead, and I’m proud to work with an incredible cohort of investors that share our vision for the industry and the continent.”
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