On The Brink with Castle Island - Chris Maurice (Yellow Card) on driving fundamental crypto adoption in Africa (EP.245)

Episode Date: September 29, 2021

In this episode, Chris Maurice, co-founder and CEO of pan-African crypto platform Yellow Card, joined us to talk about his background, the business, and the state of crypto adoption in Africa. The company's goal is to provide a seamless on and off ramp to anyone in Africa. We also discuss: Yellow Card's recently announced fundraise The diversity in culture, language, history, and economy across the 54 countries in the region and why Yellow Card is on a pan-African journey The popular use cases for crypto in the region, including as a savings and transaction tool for individuals and businesses The challenges Yellow Card faces in driving crypto adoption in the region and what the firm can do to address them The details about Yellow Card's recent raise and the future of the company Based on this conversation with Chris, it's clear that crypto provides fundamental utility beyond speculation in the region that rings true to the ethos on which this industry was built. Sponsor notes  This episode is brought to you by Withum, a top 25 accounting firm with a cutting-edge Digital Currency and Blockchain Technology practice. To learn more, visit  withum.com/crypto.

Hey everyone, this is Ria from Castle Island Ventures. Welcome to this episode of On the Brink. We were joined by Chris Maurice, who's the co-founder and CEO of Pan-African Crypto Platform Yellow Card, which actually just announced a raise in which Castle Island participated. Yellow Card has broad exposure across the African continent in 12 countries and counting, and the company's goal has been to make it seamless for anyone in the region to on and off ramp to and from the local economy into crypto. In this episode, Chris and I talk about many things, including the diversity in culture, language, history, and the macroeconomic situation across the 54 countries in the region. And why, despite that challenge, Chris has taken. taking yellow card on a pan-African journey.

We discuss the popular use cases for crypto in the region, including as a savings tool for individuals to a transaction mechanism for merchants and businesses that are currently pretty limited in how they can use traditional rails to send money in and out of their respective countries. We cover the challenges that Chris and his team continue to face in battling scam. that trick people out of their funds and give them a poor taste towards crypto. And what Yellow Card and other companies can do to improve financial literacy in the region and better protect their end users to instill confidence in the crypto ecosystem.

Chris also gives us the details on the race and how he's thinking about the future of the company and the industry. This was an enlightening and really energizing conversation where Chris, Chris and I talked about the fundamental utility that crypto provides beyond speculation that rings true to the ethos on which this industry was built. And I really hope that you enjoyed the chat as much as I did. Brought down by bad mortgage investments, Lehman, which has 25,000 employees will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis.

The bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. You print a couple trillion dollars and all of a sudden people start to worry. So out of this worry, we have something called the Bitcoin. Bitcoin. Hey everyone. This is Ria from Castle Island Ventures and we have Chris Maurice from Yellow Card on the podcast with us today. Hey Chris, how are you? Ria, I am better now that I'm here with you. It's so great to be here. It's great to have you. So let's just jump into it. Why don't you take us back to the beginning? Tell us a little bit about your personal background, how you got into crypto, what got you excited and what really drew you in?

Yeah, yeah. Well, I grew up in New Orleans, Louisiana, went to college in Alabama. So I'm about as southern as it gets. Not much of a background in tech. My first real experience with crypto was just having friends that are nerds. So my co-founder, Justin, has been in crypto since 2011, 2012, really early and started talking to me probably about 2013. And so got in, got in pretty early. Not early enough. My only regret from the time is that I was poor. Couldn't buy more, but was in early. And it took me about until 2015 to really see the potential in the space. So let's call it like a year and a half of reading and trying to learn more about this new magic internet money. And so about 2015 got just really dedicated to the space.

It became more apparent that this is the industry of the next century, never mind the next decade. Talked to Justin and wanted to figure out, hey, what can we do in the space? And, you know, 2015, it's still very early for crypto. Coinbase is around, but it's not really the behemoth that it is today. you know, you didn't have job opportunities in crypto. So your options were do your own thing or just mine, right? And so we made the decision to voyage out on our own. And the first thing that we did was one day I was on eBay and I had a product recommendation pop up and it said, you bought

XYZ so you might be interested in one Bitcoin. And I was like, well, you know, that's weird. I didn't, you know, why, how can you buy this on eBay? You didn't this a customer? currency, et cetera, et cetera. And I start looking at it and I realize people are selling Bitcoin on eBay for like 150, 200% markup. And so I send this link over to Justin and I said, man, you know how to get Bitcoin. I know how to use eBay. Let's make some money. And we, we did over $40,000 in sales that first week. And I mean, at 100% markup. So I am seeing stars, right? I am getting ready to call my mom, tell her I'm dropping out of college. I'm going to sell magic internet money for the rest of my life. And that is when I learned what a credit card chargeback is. So my introduction to crypto was actually

getting frauded out of just about all the money that I had to my name, which fortunately at the time was not a lot, right? But quite the rude awakening to the industry. And call it intuition or insanity or some mix of the two, probably a little bit more of the latter, we decided that we were still super interested in the space. So we wanted to continue to find a way to participate. And at this point, the concept of plastic was triggering. Credit cards are off the table. And we started posting ads on Craigslist and local bitcoins and all these different platforms. And we would say, you know, hey, we have Bitcoin coming up with us and give us cash and we'll give you the Bitcoin. People started responding to these ads. And so we did the only thing that

I think two reasonable college students at our position would do, which is every Wednesday at about 7 p.m. You could come to the Taco Bell on Gay Street in Auburn, Alabama. And you could find Justin and I in the back corner table eating our Doritos Locos Taco 12 pack. And you could slap a couple hundred dollars cash on the table. And we would scan your QR code and give you Bitcoin. We did that for probably about two weeks. Realized it was working, called up friends at LSU, Yale, Georgia, Alabama, every college where we knew somebody. And within another three weeks, we had seven Taco Bells, all on college campuses on the Eastern United States, where you were able to walk in and buy Bitcoin. My start in the crypto industry was selling Bitcoin out of a shitty Mexican

fast food restaurant. It's actually a great Mexican fast food restaurant. It depends on your level of inebriation, right? Yes, for sure. I love that story. It's a It's true to the original peer-to-peer ethos of Bitcoin. And as we're going to talk about later, it's kind of like replicating the mobile agent model in Africa, but with crypto. Yeah, you know, in a weird way, I don't know if I knew where Africa was on a map at the time, right? They don't teach you that in the Louisiana education system. No. But in a weird way, yes, you're right.

So, okay, let's pivot and talk a little bit about the beginnings of yellow cards. So you're doing basically like peer-to-peer transactions using things like Craigslist, local bitcoins. What piqued your interest in the African market and crypto adoption in Africa? And what ended up being your motivation behind building a crypto platform in Africa? At the time, there really was not that much adoption in Africa, especially not the way that we see today. Right now, I mean, chain analysis and anybody also tell you that, hey, Africa is booming in this industry. right? And you cannot really talk about crypto today without talking about Africa. Back then, Coinbase was still the clear leader in the space, but was certainly not a behemoth, right? It was not a $60 billion company.

The space was still young. This was before the like December 2017, right? Before like the crypto winter. I mean, everybody was still young and naive. There we are selling Bitcoin out of Taco Bells, right? We did that for probably about two months in total before realizing, hey, you know, you're not. you know, we should probably do something less sketchy with our lives. That was actually the origin of yellow card. And the original idea that we started a company with was that we were going to put gift cards in Walmart, CVS, to essentially scale this peer-to-peer model that we were operating. And so the idea was, you know, we'd put these gift cards in Walmart. You'd be able to walk in, buy it, redeem it for Bitcoin. Super easy, straightforward. And so we're working on building this out and doing the whole founder thing and all that fun stuff.

And one day, I was at a Wells Fargo in Auburn, Alabama again, of all places. And there was a guy from Nigeria trying to send $200 to his family. And Wells Fargo charged him $90 to send $200 over to Nigeria. And, you know, obviously, having grown up where I grew up, I never experienced something like that before, right? I had no idea that stuff like that really goes on in the world. I pulled the guy aside. Hey, have you ever heard of Bitcoin? It's, you know, it's free, it's instant, it's fun, all this great stuff.

stuff and I went home later and I started thinking about this guy's mom. I'm envisioning this elderly woman in Nigeria, probably barely knows how to use the internet with $200 worth of Bitcoin on our phone. And all I could think is, wow, we haven't solved anybody's problem here. Like this situation is actually probably worse now because now this poor lady's money is you know, stuck in limbo somewhere. Yeah, I mean, you know, all I could think is, I mean, you know, any time that you open, you know, I love the crypto media, right? But anytime you open the crypto media, there's an article or two about how Bitcoin solves Venezuela and stuff like that, right?

The thing is, is that that's true, but not as simple and straightforward as it comes across sometimes. And so I knew that Bitcoin solved this problem in some way. I just didn't understand how at the time. And that was what really piqued my interest in Africa and more specifically Nigeria. Having met this guy, I'm not sure if I could have pointed to it on a map, but all of a sudden, I want to know, you know, how does the monetary system work? How does the currency work? How does the banking system work?

Do people know what Bitcoin is? Can you buy it? Can you sell it? All of this. And just started doing all of this research. I'm spending my nights researching about a country, you know, halfway across the world that I didn't really know much about. And in the process of doing this research, I meet this guy on the internet by the name of Manachi.

And I like to tell everybody that Manachi is the most convincing person I've ever met in my life because within about a month and a half of meeting and talking to this Nigerian man on the internet, he convinced me to take the first international flight of my life. I think I had been on a plane maybe four times before starting this company. I had to get my passport the week before the trip. And this Nigerian man that I met online convinced me to fly to Lagos Nigeria with spending the last of my money with enough money to get there and not enough money to get back to start a company with them. So that is really how we got interested in crypto and Africa for the ultimate trial by fires. That is how all great stories start.

and I'm glad it ended up in a pan-African crypto exchange that's really tackling the challenge that a lot of people face on the continent. And to your point about this person you met at the Wells Fargo, I think I've seen reports, I think it's the World Bank that puts them out every year that calculates the cost of sending remittances into different parts of the world. And I think consistently Africa is the most expensive region to send more. money too. I definitely think you're tackling the right market. Before we talk a little bit more about Africa, can you talk a little bit about Yellow Card's business lines and business model?

Yeah, of course. So the easiest way to think about Yellow Card is that we make it easy for anyone, anywhere on the continent to buy, sell, send store, et cetera, crypto. We accept all locally applicable payment methods. So that's cash, mobile money, bank transfer, depending on the country. We accept the local currency and we make it as seamless as possible for you to on-ramp and off-ramp from the local economy into crypto and from crypto back down into your local economy. And obviously that carries over into a number of fields, right? Like you just mentioned, anything from payments and remittance to savings against inflation. We're live right now in 12 countries. We're growing quickly, right? And so the goal is to serve everybody in every country on

the continent. It doesn't matter what country you're born in, doesn't matter what currency you're born into. We think that everybody should be able to access this technology. Yeah, definitely. And I want to double click on a point you just brought up. So a lot of crypto platforms in Africa have chosen to hone in on one or at best a couple African countries. But like you said, Yellow Card is already active in more than 12 regions, and you're in the process of going live and even more. So can you explain your rationale for taking this Pan-African approach? We've taken a very unique approach, even amongst the other crypto companies on the continent that are live in more than one country. But even amongst those that are live in another country,

they're using somebody else's rails. They're expanding outside of their home market by just riding on somebody else's rails and then there's somebody in the middle that needs their cut. The unique approach that we've taken from day one is we wanted to build a truly pan-African business that would be able to not just operate across the continent because I think that a lot of people forget that Africa is not just Nigeria, right? Africa is not just South Africa. It's not just Kenya. People look at the few major economies on the continent. And that, that is the whole continent as far as they're concerned, right? As far as most businesses, most investors, as far as they're concerned, Africa is as good as Nigeria. Africa is as good as

South Africa, as good as Kenya. But, you know, the reality is that it's a massive continent. There's 54, you know, 54 very, very unique countries. They don't speak the same language, right? It's all different cultures, all different backgrounds and histories and all of that. Currencies, yeah. Currencies, yeah, exactly. And for us, really, it was two things that really encouraged us to venture out and to do it that way is, number one, it's just completely unserved. I would still classify some of the major countries in Africa as underserved outside of like Nigeria, South Africa, Kenya. I mean, these countries are just unserved, right? I mean, there is essentially nobody there. I mean, I spent some time in Congo and I met with all five fintech companies there, right? There's just really nobody building in some of these kinds. So it presents not just a massive opportunity for entrepreneurs, but also a massive number of people that need access to this, that you can help more than building another company in Nigeria, right? Where there are plenty of fintechs that are doing a lot of amazing things. That was part of it was the opportunity that we saw outside of the quote unquote like sexy part of Africa, right? like the sexy countries that, you know, generated all the foreign investment.

And so, you know, what we, what we realized is the more that we spread ourselves out and the more that we actually try to work with these countries and banks and governments, the better it'll be for everybody in the long run. We're doing a lot of the hard work of actually trying to formalize the industry, work with the central banks, work with the governments in these countries to make sure that there's a mutual understanding of what we're doing, of what crypto is, of how it, works. But the main thing is we want to make sure that everybody on the content is able to access this technology, not just those that are born in Lagos, Nigeria exclusively. Yeah. And then going back

to this idea of expensive money transfer into Africa from outside the continent, it's even more expensive to send transactions between countries within the continent. So I feel like that definitely is a big advantage for a company like Yellow Card that's hopefully going to make it cheaper to do that, leveraging transparent crypto rails. Is that something that you're seeing people adopting across the 12 countries? Are people actually starting to use Yellow Card in that way or is it a little ways away? People are. What I love about Africa, what I love about crypto in Africa is that it's nothing like crypto in the U.S. or crypto. in Europe or crypto in any other Western country.

Whereas if you're buying crypto in the U.S., you're buying it because you want the price of Bitcoin to go up, people in Africa are using it for practical purposes. They're using it to finance and actually be able to run their business effectively, right, to be able to make imports, to be able to send money to friends and family. It really is incredible what people will do to solve their problems, right, and how they'll figure that out. The idea of connecting the dots between countries was not really sort of on our mind, right, when we were going bad African. The original idea was never like,

oh, we're going to do this because that it'll be easier for people to send money from, you know, Nigeria to Ghana, right? Right. It just sort of happened that way. Part of our job is to adapt to what the market needs, right, and what the market tells us that it needs. We certainly see people that are doing that today and we obviously want to make it easier for them in the future. But, you know, It is funny. I mean, a very short story about when I first found out about that, when we first saw that people were using the platform that way, right? In like, you know, we were like, oh, you know, this is kind of weird transactions going on and we looked into it. I remember talking to Manachi and, you know, asking him, how do you send money from Nigeria to Ghana?

And he laughs and he goes, bro, you don't, you drive it. So it is a big problem, right? To your point, and those are the most expensive corridors in the world are between African countries. Yeah, I heard a similar anecdote. I started listening to this podcast called Afrobility. And one of the hosts of the podcast said a similar thing where he was working in, I think, Nigeria and his family was in a different country in the region. And he was like, it was not simple to send money back home from there. So it's exciting to see that people are starting to adopt it that way.

In terms of the adoption of specific assets, what assets does Yellow Card offer to its end users right now? And what's the balance of adoption really been for these assets? Right now we offer Bitcoin, USDT, and Ethereum. Stick into the top of the market cap. And what I can tell you is that Bitcoin is usually everybody's first purchase, right? Bitcoin is everybody's sort of first foray into the... the space, right? It's what everybody's heard of. And people will use Bitcoin in Africa until they learn about Tether. And once they learn that there is a token that solves the exact same

problems for them that Bitcoin solves, but does not have the volatility risk, they are all over that. Bitcoin started out as the king. The majority of our volumes were Bitcoin, et cetera, et cetera. Tether has shot far past that. Tether is definitely the majority of our volume now. And Tether, specifically Tron chain Tether, is the king right now in Africa. In terms of the number one most used crypto across the continent, it is USTT, TRC20 on Tron. I mean, you know, just again goes to show that, you know, Ethereum fees are too high, right? Yeah. Which I imagine is a large part of the reason that USDC is trying to start pushing on, what do you

call it Salana, right? Yeah, definitely. And, you know, some of these other chains, I'm sure that they see what's going on with, like, Tron Tether. The Ethereum fees are just too high. I mean, you know, if I'm, if I'm sending $100 because I need to send money to a family member, I'm not going to pay $20 to do that. I'm not going to pay $50 to do that. That goes back to the same problem that we're trying to solve. This episode is brought to you by Witham. Witham is a top 25 accounting firm. They have a cutting edge digital currency and blockchain technology practice. Wherever your company is from a stage perspective, from pre-seed to IPO, they have tailored solutions just for you. They have helped some of the largest companies in the crypto industry with audit, tax,

and advisory needs, and they've also helped a number of our portfolio companies. To learn more about advisory, audit, and tax services, head over to on thebrink.link.link slash with them. That's on the brink.combeen. Beyond the obvious examples that you mentioned, Nigeria, Kenya, Ghana, South Africa. What determines which country you're going to pursue next? I have the real answer, and then I have the answer that I would tell you to make it sound like we had a grand dose plan. The real answer is in the beginning, we looked at which countries have a big population and have somewhat of a good economy and tried to get an intro to literally anybody in the country. That is basically how we did it when we started it out. That's how we ended up in countries like Botswana that

typically would not be first on the list, but have worked out great because we got introed to great people in the country and we were able to put together a team there and people have problems no matter where you are in the world. That's how we got into some of the countries like that. Typically you would not think about in terms of like next steps, right? Yeah. But now that we have exhausted most of the easier countries, countries that are a little bit more business-friendly and easier to set up and get going and that kind of thing. Now it's a matter of which governments are willing to work with us, right? How can we work with the government there? As we look at expansion, we are significantly more interested in how do we get some sort of central bank

approval or something like that. There's two countries now that we're getting things set up in because the central bank has essentially told us, you know, hey, we have no objections to this. You're, you know, you're operating here, right? And so those countries, which will be coming up soon, are certainly more difficult. And so that's more of what we look for now is which governments are really willing to work with us, right? And that's, I mean, you know, as we expand into some of the more difficult countries and some of the countries that really don't have any real foreign business or foreign investment going there right now. We want to go there, right? We want to invest. We want to hire locally. We want to set up an office. We want to help contribute to the economy.

For us, it's really a matter which governments are actually willing to work with us and talk to us and have an open dialogue about it. Yeah, for sure. I think that's one thing that you guys have done really well is just hire extremely talented people that are passionate about crypto in these markets, which I think is really important, as you know, to hire local talent. So that's been awesome to hear. Just going back to regulation, so what are some of the regulatory hurdles that you've had to overcome to offer services in certain countries if it can be generalized? What kind of licenses do you need to operate in Africa? When it comes to regulatory across the continent. It's a lot more art than science. Again, it's 54 countries with 54

governments and 54 unique perspectives. Everybody's a little different in the way that they think about it, the way that they approach it. We've had some countries that are extremely friendly. We have licensing that allows us to operate freely in six countries. We have countries that are very friendly, right, and that are willing to talk to us and work with us and even sort of adapt existing regulations to fit this new age technology. And then we have others that are more difficult, right? And want to see a lot more assurances and that kind of thing before they're really willing to open up. And, you know, it makes sense. Unfortunately, there's been a lot of scams across the continent for crypto. For a lot of people and, you know, regulators are people too, right?

For a lot of people, their first or second or third experience in crypto on the continent might have been some sort of scam. That's not that uncommon, right? I mean, some of the biggest people I know in crypto on the continent got brought in originally because they were introduced to some what turned out to be a Ponzi scheme before they got into more legitimate crypto. The regulation makes sense. For us, the big thing is that we want to work with the government. We want to help formalize the industry. And so we really like it when governments and banks and all are willing to work with us. That's something that we're very careful about as we grow is we try to work with big reputable banks in each country because we want to make sure that, I mean,

one step below the central bank is the largest bank of the country. They're on a direct line to the central bank director. We want to make sure that their compliance team has reviewed it and they're okay with it. Then as we're having these conversations with central banks, which obviously drag on for a lot longer, it's, you know, hey, look, we're doing X, Y, Z. We have a great compliance team. I mean, you know, our director of compliance was the former head of MoneyGram for Africa, right, for compliance. We have a great compliance team. We're working with your big banks. What do you need from us in order to get some sort of approval or, you know, no objection or even just a nod and a wink? What can we get from you to know simply for ourselves to know that we're

doing this correctly? That makes a lot of sense. Is there a correlation between countries where the government is regulatory supportive of the crypto ecosystem and the level of adoption in that ecosystem or is there not really a correlation there? Yes and no.

Some of the countries that are more crypto-friendly do have a good amount of adoption. That being said, the adoption is by far the highest in the countries that are not as crypto-friendly. Right. Right. So Nigeria, you know, the CBN back in February for context basically told banks,

hey, you're not allowed to work with crypto companies anymore. We had six bank accounts in Nigeria at the time. All of them got shut down. That's still the case today. Banks are not allowed to work with crypto companies. Crypto is not illegal. They've said that multiple times. They're just, they're making it difficult, right? That being said, though, I mean, Nigeria is by and large, the way in terms of crypto adoption on the continent. I don't know what the number is specifically in terms of people in Nigeria that use crypto, but I know that in South Africa, it's something like 10% of adults have used crypto. So I would venture to say that in Nigeria, that number is higher, right?

And Nigeria is also, what, three, four times the population. Nigeria is definitely leading the way in terms of that adoption. Yeah, definitely. And then what other factors do you see are contributing to interest, more interest in one country relative to another. Is it demographics? Is it the macroeconomic situation? Inflation? Are those factors driving interest in crypto? Inflation's a big one. The weaker that a particular currency gets, the more that people living on that currency are going to look for anything stable to put their money in. I'm sure you've heard before that the old way of saving money across the continent was,

people would build a house literally one brick of mine. You know, if I can afford to put up like half of a wall this month, then I'm going to put up that half of a wall and I'm just going to leave it there until I can afford to put up the other half of the wall. Then I'll put up the other three walls and then the roof. And over the course of five, ten years, I've built a house. And that is what my savings has gone into because it's better than holding the local currency. Fortunately, in some countries, the currencies have stabilized a little bit, but a lot of people across the continent still live in that reality and in that fear of inflation. It's particularly bad right now in countries like Nigeria, obviously like Zimbabwe, but it is a fear for a lot of people across the continent,

even in countries that are more stable right now because they lived for, I mean, at least 20 years, right? If you're dealing with money that you have to save, you know, you're probably like, what, like 16 plus years old. So you're all. enough to remember the last time that something bad happened. That is a big driving factor. Store your money in something that's not a depreciated asset. Store your money in something that's not at risk of getting stolen or at risk of getting knocked down or, you know, anything like that. Savings is definitely a big one that draws people in. Another one would be payments. We see a lot of merchants that, you know, I'm a guy that sells shoes that I import from China on the side of the road.

And so in order for my business to succeed, in order for me to feed them, my family, for me to hire any employees that I may or may not have, for me to build my shop, for me to have money to turn around and buy from other vendors and buy food and contribute to the local economy, I have to be able to import those shoes from China. If policies make it extremely difficult to get dollars and to be able to send them to that supplier in any meaningful amount, then people are going to look for an alternative to support themselves and their families. crypto has also provided sort of an alternative there. Those would be sort of the two big things.

I think it is largely macro events or just trends, right? Yeah. That draw people in. Yeah, that makes sense. Another anecdote that I've heard in addition to people building one wall at a time is people buying cattle or farm animals as they're kind of like store of that, like temporary store of value in a country where inflation is really high. That one was interesting too.

And then I guess another factor that makes the region ripe for adoption and correct me if I'm wrong is the fact that one, generally the population tends to be on the younger side. So, you know, you have this young population of people. And two, there's significant adoption of mobile money. So can you talk a little bit about mobile money and then what are the other typical on and off ramps in? the region and then maybe how does it differ from one country to the next? Mobile money is big in countries where there is mobile money. And so in Kenya, everybody hears about Mpesa. Mpasa is like the poster child successful fintech in Africa.

Crazy penetration, something like 90% of people in Kenya use Mpesa. And mobile money, you can essentially think of it as Venmo. It's Venmo, it's cash app, it's a application on your phone. In some cases, it's not even an application. You can just use it by texting a number, just like you do on cash app. And so, yeah, it's, I mean, it's extremely prevalent again in countries where it is because it just makes it so much easier for people to be able to send money within the country. It's not free.

It can get a little pricey, which is why it's not always something that people use if they want to buy a car. You wouldn't use it for larger transactions. It's generally used for smaller transactions. but yeah, definitely an extremely popular way of being able to move money. And then cash as well, cash is big. Fortunately, countries that rely very heavily on cash, most of them have pretty good mobile money systems now,

which is good because now on any corner, I can deposit or pick up cash from my mobile money wallet, which makes it a lot easier than trying to lug around wheelbarrel full of bills to be able to make a payment. Because the largest bill in some countries is only worth one, two, US dollars to make any sort of sizable payment. You're talking about a ton of cash, right? And then banking is more prevalent than people think it is. And there's always been this sort of like, we need to bank the unbanked. And you hear that all the time in regard to the continent. And bank penetration is

kind of a vanity stat in terms of Africa in that if I want a bank account and I have enough money to warrant me opening a bank account, I can go get a bank account. I can go get a bank. account in pretty much any city. People are not unbanked because they cannot open a bank account largely. There are exceptions. More realistically, people are unbanked because they don't have enough money to really warrant opening a bank. They don't really have any need for it. That's where mobile money has really come in to help out those people that exist maybe in like a lower income bracket that don't necessarily need a bank account anymore because now they have. a digital solution. The other reason is it because in order to get the most value out of your bank

account, you need to go to a physical branch, but bank branches aren't prevalent as much as mobile money agents across the region. Is that another reason? That's 100% true. Again, if I'm in any semi-major city, then there are bank branches. I can bank, I can access tellers, et cetera, et cetera. If I am in the middle of absolutely nowhere, Zambia, somewhere between, like, Lusaka and, you know, Harare, Zimbabwe, and I pull over on the side of the road and need to get petrol and whatever, there's a guy that is there ready to exchange mobile money for cash. Yeah. So mobile money is about as prevalent as it gets, simply because it's so easy for people to facilitate those transactions. It's either cash in or cash out. It's provided a ton of jobs.

It's like cash app. It makes it easier for people in a particular country to be able to transfer money within that country. You brought this up earlier, but one of the biggest barriers to adoption has clearly been the proliferation of scams. So people involved in a scam, a crypto scam just generally have a poor view towards the entire industry. Do you have any anecdotes of like what types of scams the region has struggled with? And then how is Yellow Card trying to address this challenge? Yeah, well, I mean, if you want to see the type of scams, just go on Facebook, type in Yellow Card.

And anything that is not our official page is a scam that somebody is trying to pull, right? So you can, you know, play around on those groups and see exactly what they're doing, right? But I mean, it's, you know, it's a lot of the, it's a lot of the typical stuff. That's that blatant. Yeah. Oh, yeah. Oh, yeah. If anybody from Twitter or Instagram or Facebook is listening, please verify us.

Please help. PSA. Yeah, I mean, it is, it's pretty bad. We probably catch, right? And keyword is catch. Yeah. Three a day. It's pretty prevalent.

A lot of it comes down to financial literacy. And unfortunately, when people do fall for these scams, oftentimes it's really just a, matter of they've never really learned better than, you know, hey, if somebody tells you that they're going to take your money and give you a 400% return by tomorrow that they're trying to scam you. That's the most typical type of scam that we see is give me your Bitcoin and I'm going to, you know, send you. You remember when that kid hacked like all of like Obama's Twitter and like Elon Musk's Twitter and, you know, it was like send me one Bitcoin and I'll send you back 50, right?

It's like essentially that just at scale, right? So that's a lot of what people are trying. It's unfortunate, right? People get tricked into this stuff occasionally. Fortunately, we've gotten a lot better at catching it. So even when it's happening on our platform, we've gotten a lot better at stopping it, freezing the account, making sure that nothing happens. That's why it's so important to us that we do work with governments so that they understand

that this industry is important, right? This industry is helping people. But at the same time, there needs to be a clear way to distinguish between, good actors and bad actors. Again, PSA to Facebook, Twitter, and Instagram as well, because they can help us as well. Verify Yellow Card. Given that Africa is such a fragmented continent, as we've talked about multiple times today, how does customer acquisition differ across the region? Is there an overarching tool or

strategy that's been successful for you guys? It's a careful mix of both digital and in-person ads. Obviously, digital ad, you know, everything that you're familiar with, Google, Facebook, all that fun stuff. That's all great. It works well to an extent, but there's also still a level of discomfort or mistrust or, you know, whatever you want to call it. Yeah, I mean, you know, for us, it's digital advertising to make sure that people have heard of us, to make sure that people know who we are, to know that it's an option. And then if they still don't trust us, well, here's another ad for an event that we're hosting this weekend at a mall in Botswana. Here's another ad for we rented out a hotel in Cameroon or here's another ad on a billboard driving down the streets of Kamala.

It brings what we tell people online into reality. And it gives them also a chance, especially, you know, the events and everything that we host every week, it gives them a chance to ask questions. It gives them a chance to like meet country managers, meet our customer support team in the country, right? Meet our marketing managers. The people that they're actually going to be working with, buying from, they're going to be trusted with their money. Let them know that these are real people and that we are a real company and all of it's real. That's the hard part. That's where, again, you know, all of it's more art and science. That's something that I think that we have done uniquely well is

actually advertising locally and gaining that trust of the people that are using the platform and signing up. Another great onboarding funnel that Yellow Card is doing is just education, building up educational content around crypto. What are the investment theses and what to look out for? And it seems like using the events that you're doing is a great way to reinforce and raise awareness of all the content that you have available. For sure. That's a big part of it as well. We put up a Yellow Card Academy as part of our initiative to really localize that content and make it relevant to what people are experiencing locally. So we hired content creators from across the continent and we had them write about crypto, educational pieces, and then also about just general financial literacy.

Like, you know, hey, how do you save money? Stuff that's relevant to you as some woman in Kampala, stuff that's relevant to you. That's something that we've taken initiative on and definitely hope to continue to push forward with. I love that. So a little bit late in this conversation, but congratulations on the round that you're announcing. You guys just raised a series A. Can you tell us a little bit more about this round and what you're intending to use the proceeds for? And then talk a little bit about what's next for Yellow Card.

You guys gave us the money, so I should be thanking you. We were fortunate enough to put together an amazing series A, 15-nil from top names in the industry and in fintech more broadly. So we have Bilar Ventures, Castle Island, Third Prime, Cash App, Coinbase, blockchain.com, polychain, fabric, you name it. We're super excited. And let me tell you, it's something else actually having money. I mean, it took us like two years to put together our seed round because we were walking around with a PowerPoint telling people we're going to sell Bitcoin in Nigeria. right, which was not exactly the sexiest idea at the time. But we're used to not having money. So having money has been pretty crazy. So definitely excited to see what we can continue to do with that.

I'm going to go back into customer acquisition, right, into customer education, customer acquisition and expansion, making sure that we can actually reach everybody across the continent. That's amazing, Chris. We're stoked to be working with you and really excited about the product that you've built, the team that you've put together, and this market, as I'm sure the audience will agree with after this conversation, there's so much opportunity and a real way to use crypto in the way that it was intended to be used. I'm very excited to see how you guys succeed. Thank you so much for joining. I'm just trying to be the best Ria I can be. I should be thanking you. So that's great talking to you. And yeah, we'll look forward to doing it again soon.

Sounds great. Thanks for listening to another episode of On the Brink with Castle Island. To find out more about Castle Island, visit castle island.VisC. To listen to all of our podcast episodes, please go to On the Brink dashpodcast.com or just click on the tab in our website. Thanks for listening.