VALR, a crypto exchange in South Africa, has raised $50 million in a Series B equity funding round. The proceedings were led by Dan Morehead’s Pantera Capital. Other participants included Alameda Research, Coinbase Ventures, and Avon Ventures, among others.
The round secured a $240 million valuation for VALR, and marks the largest crypto funding round in Africa to date, as per the exchange. Back in July 2020, the exchange had raised $3.4 million in its Series A round.
VALR to branch out
Launched in 2019, VALR currently has over 250,000 retail customers, most of whom are based in South Africa. It additionally caters to over 500 institutional clients as well. Participants can trade and store 60+ cryptocurrencies, including Bitcoin [BTC]
VALR intends to use the funds to expand its territory and venture into other countries in Africa, alongside other emerging markets like India. The exchange also aims to offer additional products and services to its existing customers.
VALR’s CEO and Co-Founder Farzam Ehsani said in a statement,
“There is no longer any room for doubt regarding the impact crypto assets are having on our global financial system.”
He added,
“We already help VALR’s customers enter this new world of crypto from the traditional financial system using their USD or [South African rand] and I’m very excited that this round of funding will allow us to serve so many more across Africa and the world.”
Further, VALR also plans to bring on more institutions from the traditional financial system to help them with the infrastructure needed to enter the crypto asset market. According to its announcement, the firm will continue hiring across all areas of its team.
Don’t mind the gap!
Back in the first week of February, VALR had announced the closure of its crypto arbitrage service to new customers in order to comply with the requirements of its banking partner. The said announcement made VALR the latest South African crypto exchange platform to close its arbitrage business. Ovex was one of the first exchanges to announce its exit from the market.
At that time, the exchange had insisted that its exit from the arbitrage market will not affect other services. In a statement to MoneyWeb, the company said,
“The decision to discontinue our arbitrage service has been taken to comply with some of our banking partner requirements. No other VALR services are affected and your funds remain secure. You will continue to have access to Africa’s largest marketplace for crypto assets with the ability to buy, sell and store over 60 cryptos on VALR.”
Arbitrage, as such, takes advantage of price differences in local and international asset prices and lets market participants make a quick 3-5% profit on average on a single trade at relatively low risk. People from the space have been using this mechanism for years now to make passive income.