South African crypto exchange VALR raises $3.45 million in Series A funding

VALR, one of South Africa's largest cryptocurrency exchanges by trading volume, has raised 57 million rands (~$3.45 million) in Series A funding.

The round was led by 100x Ventures, the investment arm of 100x Group — the newly created holding company of BitMEX and HDR Global Trading. Another new investor included South African venture firm 4Di Capital. Existing investors Bittrex exchange and former CEO of FirstRand's First National Bank, Michael Jordaan, also participated in the Series A.

With the fresh capital in place, VALR wants to expand into new markets across South Africa, launch new products and services such as derivatives trading and lending, and strengthen its team of technology, compliance, and client service functions.

Founded in 2018, VALR launched bitcoin-rand trading in June 2019 and claims to be South Africa's largest bitcoin exchange by trading volume. The exchange said it traded over 13,000 bitcoins (about $120 million) in June and has over 40,000 customers.

"South Africa has an incredibly exciting and fast-growing cryptocurrency ecosystem, and we believe VALR is well-placed to capitalize on future growth of bitcoin trading," said Arthur Hayes, CEO and co-founder of BitMEX and 100x Group.

Jordaan said he is "very proud" of the VALR team because it is "never easy to raise R57m for a startup." This is "undeniable validation of local crypto potential," he added.

Indeed, much of Africa’s 1.2 billion population remains unbanked, according to the World Bank. And at least 64 crypto and blockchain companies are working to improve the continent's financial inclusion, according to The Block Research. 

Today's Series A brings VALR's total funding to date to 79 million rands (~$4.78 million). The exchange raised 20 million rands (~$1.2 million) in a seed round last year. 

It is worth noting that BitMEX's parent company is increasingly investing in crypto exchanges across the world. Last month, it led $3.5 million Series A for Singapore-based crypto options exchange Sparrow. In March, BitMEX operator led Indian crypto exchange CoinDCX's $3 million Series A round.

With the new entity 100x Group, BitMEX parent wants to "explore, incubate and pursue new opportunities and investments beyond what we're doing today."