Crossfin Ventures, the angel investment arm of Crossfin Technology Holdings, has invested an undisclosed amount in Troygold, a South African fintech firm that enables gold owners to digitise physical gold and use it for day-to-day transactions via a mobile app and gold-backed Mastercard.
Crossfin Ventures chief operating officer Anton Gaylard says the investor was attracted to Troygold due to the strong team and powerful value proposition.
“Enabling a broader market to save and transact in fractions of gold was particularly appealing, especially since gold is a finite resource that has stood the test of time and is free from the uncertainty and volatility of fiat currency and crypto-currency.
“Our objective for the investment is to leverage the complementary elements of the broader Crossfin portfolio and explore opportunities for expanded banking and financial services backed by gold.”
Troygold digitises gold bullion and Krugerrands and then allows customers to buy, sell, spend and borrow against their gold.
Vaulted gold bars or coins with serial numbers are digitised via Troygold’s system, offering whole or fractional ownership.
Gold is directly allocated, and customers receive an ownership certificate showing which bar or coin and what serial number they own, as well as where it is stored.
The company currently has storage facilities in Johannesburg and Singapore.
Bastiat Viljoen, CEO of Troygold, says the ongoing volatility in the global financial system and the deteriorating value of fiat currency make a strong argument for a return to gold-backed stores of value.
“Gold has a 6 000-year track record as a safe store of value, and is the only money that carries no counterparty risk,” Viljoen says.
“In a volatile world, gold offers a safe haven asset that always maintains value. However, most gold sits in the dark in vaults and safety deposit boxes, and we wanted to ‘light up’ that gold with utility and turn it into something gold owners can use for day-to-day transactions.”
The Troygold business was founded by Bastiat and brother Dane, who is the company's chief sales officer.
The brothers studied at New York University during the time of the 2008 global financial crisis and worked for the likes of Goldman Sachs.
“We saw first-hand the damaging effects of money printing and the debt-based financial system, and wanted to introduce an alternative,” explains Dane Viljoen.
“After working in the investment banking sector, we turned our attention to understanding the gold value chain, and saw a gap for a technology-led solution that would extend digital financial services to physical gold owners.”
Troygold offers two options to customers – a free gold savings account that digitises the customer's gold stores of value, and a Mastercard-backed gold debit card that enables gold owners to purchase goods and services at any of the 40 million Mastercard-accepting stores worldwide.
“The last time the average South African was able to transact in gold was during the Johannesburg gold rush in the 1800s, and early 1900s,” says Viljoen.
“With the investment from Crossfin Ventures, we hope to scale our solution to reach more South Africans wishing to free themselves from the inflationary effects of fiat currency and enjoy the stability and financial freedom that gold brings.”
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