Bitcoin: VALR, the cryptocurrency platform with a spiritual message

By Quentin Velluet
Posted on Tuesday, 13 September 2022 11:46

VALR billboard at Cape Town International Airport, South Africa. The start-up's vision advocates a financial system based on unity, freedom and justice, true to the precepts of Bahā'ism, a monotheistic Abrahamic religion born in the 19th century whose followers are estimated to number some 7 million worldwide. ©TERTIUS GOUS/VALR

Imbued with the values of Bahā'ism, a monotheistic religion born in the 19th century proclaiming the unity of humanity, the South African start-up valued at $240 million has said it wants to emancipate itself from the borders imposed by the concept of the nation-state.

Israel, 1999. In one of the sumptuous gardens that adorn the Baha’i World Centre, located in the heart of the thousand-year-old city of Haifa, Farzam Ehsani, an American student born in Kenya to Iranian parents, is leaning over a row of rose bushes that need pruning. Having arrived a few weeks earlier from Los Angeles, the young economist, a follower of bahā’ism, a denomination stemming from Shiite Islam which advocates the uniqueness of the human race and considers that all religions have a common basis, has come for a one-year spiritual retreat.

Isolated and meditative, the young man had no idea that twenty years on, after working for large consulting firms such as Deloitte or McKinsey, he would put his religious precepts to use in an entrepreneurial venture that would make his start-up one of the most popular on the African continent.

A $50 million financing round

Farzam Ehsani [typo in French version] is a fan of blockchain, a new technology considered revolutionary by many observers because it is capable of offering an alternative financial system to the centralised model that the world has known since the creation of banks. He is at the head of VALR with his partners, South African computer engineers Theo Bohnen and Badi Sudhakaran. Based in Johannesburg, the company has reached a valuation of $240 million following a second funding round of $50 million finalised in February 2022.

Several US funds are financing it. These include Coinbase, one of the most influential platforms in the international crypto ecosystem, and Pantera Capital, the first Californian fund specialising in Web3 companies, a decentralised version of the internet and its applications, based on blockchain protocols.

VALR aims to build a financial system that recognises the uniqueness of humanity

Founded by three former Amazon executives and present around the VALR table since its first fundraising round – alongside Michael Jordaan, former CEO of the South African First National Bank –, the Liechtenstein company Bittrex secures the platform’s transactions, which can be carried out via its website or its application.

The young start-up, which employs about 50 people, claims to have more than 300,000 clients – mostly South Africans – and 500 institutional clients for an estimated annual transaction volume of $7.5 billion in about sixty different cryptocurrencies. It makes its money on transaction fees applied when users withdraw their money from the platform or make a transaction (0.75% commission charged when buying crypto and 0.75% when trading).

Ideology meets business

Beyond his company, which uses the recipe that made the success of major Western platforms such as Coinbase, Binance or FTX, Ehsani seems determined to bring the values of his religion into his entrepreneurial adventure. “VALR aims to build a financial system that recognises the uniqueness of humanity,” the company states on its website, believing that “the organisation of our world into nation-states no longer meets the needs of humanity”.

According to other slogans addressed to its customers, nicknamed “VALRians”, “humanity aspires to be unified, but our structures [such as that of money, taxed as soon as it travels and crosses borders, editor’s note] continue to divide us”.

Imbued with libertarianism, a political current that advocates the emancipation of individuals from the notion of the state and everything that makes it up (institutions, centralised financial system, taxes…), the ideology linked to bitcoin and other cryptocurrencies created since 2008 involuntarily joins the precepts of bahā’ism, which VALR seems to have penetrated. This differentiates it, at least in substance, from its main competitor in South Africa, the British Luno, which has been around longer and is active in Europe, Southeast Asia and the US.

Blockchain pioneer

Immersed in the world of bitcoin from a very early age, the graduate of the University of California at Berkeley is also one of the pioneers of the genre in South Africa, since he embarked on the adventure with his employer at the time, Rand Merchant Bank (RMB), by creating an entity dedicated to blockchain in 2016. He thus participated in the bank’s conversion to cryptocurrencies while beginning to design products and imagine potential partnerships to develop this new activity.

After that, in 2017 Ehsani became chairman of the South African Financial Blockchain Consortium, a lobby designed to promote blockchain and the benefits of bitcoin within the Rainbow Nation. Bringing together the entire South African financial landscape, the organisation encouraged the Central Bank of South Africa to authorise, on 24 August, cryptocurrency platforms to work with traditional banks.

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