In a world where cross-border money and financial transactions are heavily controlled by country boundaries, and a myriad of intermediaries who add costs to global transactions, an effective, less-costly means of conducting transactions becomes a prerequisite to improving financial and economic outcomes.

Cryptocurrencies have, long since their inception, been an effective means of conducting such cross-border financial and monetary transactions. They provide the ease and cost effectiveness that these transactions deserve.

However, accessing the crypto assets within the traditional financial systems is generally impossible except in a few markets. This is why exchange platforms are a convenient solution for most people looking to gain access to the crypto rails.

Registered in 2018 in Johannesburg, South Africa, and began trading in 2019, VALR is a crypto exchange platform that seeks to bridge the gap between traditional financial systems and the new systems where cryptocurrencies reign.

The platform, which was started by four colleagues with mainly a background in the banking sector, provides a solution through which its users can exchange cryptos, allowing them to trade cryptocurrencies as well as providing a profitable venue for liquidity providers to earn from market making activities.

With its wide variety of digital assets, VALR enables one to buy, sell, store and transfer different cryptocurrencies seamlessly and securely, giving users a means to leverage the global nature of crypto transactions. VALR also offers a range of services around this core marketplace services such as leverage and off chain payments. Features such as staking, lending and futures are on the horizon.

Reducing Crypto Fees in South Africa

“VALR was started based on the premise that the fees in the South African crypto exchange market were very high then. Basically there was only one exchange platform and it was quite expensive to conduct trade through it,” Blake Player, the Head of Growth at VALR told NODO News at the CV Africa Summit in Cape Town. “VALR felt that there was room for more competition, and hence came up with the platform that provided competitive fees and offered rewards to market makers.”

The crypto platform also offers an advanced spot exchange for professional cryptocurrency traders, and also simple buys and swaps creating an easy trading experience for beginners in the crypto exchange space.

Further to these, VALR has advanced features such as sub-accounts and a best in class API to integrate with the platform. These features are available to all customers. VALR also has several large institutions leveraging its core crypto and exchange infrastructure (through the VALR APIs) to provide crypto products and services to their end customers.

When it started, the founders of the platform were leading from the frontlines. They performed all the everyday duties to ensure that VALR succeeds, from customer support to finance. It was a true startup bootstrapping effort from a small office in Rivonia, Johannesburg. And it became a success story.

Currently VALR is a leading exchange platform by volume headquartered in Africa, and, even amongst the international exchanges, has a large volume in South Africa. It is said to control between 50% and 55% of the market share in the country, competing with other crypto investment platforms like Luno.

$20 Million in Daily Transactions

Player says that VALR, which now has nearly 500,000 registered retail users and 900 corporate customers and institutions in Africa, currently trades between $15 million and $20 million daily which is no mean feat by any chance.

And the prospects are bright for the crypto exchange platform.

He opines that South Africa’s innovative industries, resilient and tenacious people have been the key in enhancing the crypto ecosystem in the country. South African tech entrepreneurs, he feels, have proved to be successful despite a tough environment.

“To be honest, it is quite tough raising funds within the South African environment. Both VALR and Luno (although headquartered in London) have achieved quite a feat in raising funds in the country,” Player reveals to NODO News. “It’s a pity that this is the case. Nevertheless we managed because we had a great product, a great team and great founders who believed in the product’s vision. Of course our investors backed this vision and the people bringing to reality”

Outside of South Africa, VALR expanded into Zambia at the end of 2022. This was the first such expansion drive outside the country of its origin. Challenges however abound in its Zambian expansion drive especially within the country’s banking sector and challenges local authorities have with understanding the business model.

Player explains that when venturing into African markets, it is quite challenging due to the low level of understanding of the ecosystem. This is one of the reasons why tech meetups, conferences and summits are important in the continent to create more exposure and awareness towards the crypto ecosystem and other similar products.

Operating Crypto Exchange is Costly

“For instance, obtaining banking rails and managing the country’s local fiat currency proves to be quite a challenge. The understanding of the industry by local authorities, and regulators makes operating an exchange in a new industry quite costly,” Player indicates. “Dealing with banks, authorities and regulators can be very costly and time consuming. Fintechs need to be careful and tactical about where they set up as unfortunately the difficulties and cost associated with market entry, especially in smaller African markets, can outweigh the commercial opportunity in the market.”

He says: “In an industry that has lots of headwinds -including unclear or hostile regulations, difficulties accessing banking, all in addition to normal business risks – it is great to meet people who have similar challenges as yours so that you can share learnings and exchange ideas on how to address these challenges.”

VALR, he says, puts its focus on the needs of its customers, building close relationships with their core corporate and professional customers and remaining conscious of where the markets are. The platform also has been careful about deploying capital and has kept the business well capitalized to withstand market headwinds. And these have been key for its success thus far.

-Edited by Shigeru Sato
-Photos: Blake Player, the Head of Growth at VALR / Photographed by Faustine Ngila, NODO News