Africa is the world’s third fastest growing crypto market, with crypto adoption soars by over 1,200% The past two years. Countries like Nigeria, Kenya and South Africa are largely responsible for the skyrocketing adoption rates as citizens try to hedge against currency devaluation and build wealth.
Despite African governments’ inconsistent stance on cryptocurrencies, these countries are home to most of the continent’s crypto and blockchain startups. In the latest development, such a company, bitmamahas raised a $1.65 million pre-seed expansion, on top of the $350,000 it received last October, closing the round at $2 million.
Africa-focused venture capital firms Unicorn Growth Capital and Launch Africa led the investment in Bitmama. Others include existing and new investors such as Adaverse, Flori Ventures, Tekedia Capital, GreenHouse Capital, ODBA, Five35 Ventures, Chrysalis Capital, Enrich Africa, Thrive Africa, Angellist Ventures and angel investors including Rene Reinsberg, Marek Olszewski and Honey Ogundeyi.
The US-Nigeria-based company, which has built a distributed outside team in Nigeria, Ghana and Kenya, says it is working to democratize Africa’s highly fragmented payment system by leveraging blockchain-based solutions.
Director Ruth Iselema founded the Africa-focused blockchain payments startup in 2019. Adam Omar is the company’s CTO, while Akinbola Asalu is the COO. According to the executives, Bitmama started as a WhatsApp group where members learned about crypto, especially bitcoin, and transacted. They then built a crypto exchange platform and formally gave these users access to virtual assets and explore other use cases including buying, selling and trading crypto and peer-to-peer transactions. More recently, the company introduced changeraa social payment solution that allows customers to use stablecoins to facilitate transfers and international payments on Netflix and Amazon via virtual cards.
“We started Bitmama to make it easy for everyone on the African continent to buy and sell cryptocurrency. But as time went on, we saw some instances where we could use this technology to solve the problem,” CEO Iselema told toptecheasy.com during a phone call. “A lot of people wanted to transact in addition to buying and selling crypto, so we built things that would allow them to buy local and international airtime and data as well. Then, due to local debit card restrictions of $20 monthly spending, we issued virtual dollar cards to Nigerians to make international purchases.
The company says its Changera virtual crypto debit cards, funded with stablecoins, have more than $10,000 in monthly spending limits and can “work for online transactions anywhere in the world.” According to the CEO, Bitmama launched Changera at the intersection of blockchain payments and lifestyle, mainly targeting non-crypto savvy people who are more comfortable using platforms with simple UI interfaces and less crypto jargon to communicate.
Earlier this year, Bitmama had less than 20,000 users on both platforms. That number has grown to more than 70,000, Iselema noted, adding that both products, Bitmama Exchange and Changera, have been massively included with minimal marketing. Revenue comes from margins on the trades that users make on the platform.
African blockchain startups raised $91 million in the first quarter of 2022 alone, compared to $127 million received from investors in 2021. , exchanges, and remittance platforms remain the most supported in the space, for example, Afriex, Yellow Card, and VALR. Other notable names include YC-backed Buycoins, Quidax, and Busha.
While Bitmama isn’t among the continent’s most funded blockchain platforms, Iselema boldly claims it’s one of the most innovative blockchain companies out there — and the new investment will enable it to be more tenacious in that regard.
“One thing that is the backbone of Bitmama is that we are very innovative. Since we got into the ecosystem, we’ve done a lot of things where we were first,” she said. “For example, we were the first to launch QR codes for offline onboarding. Even when we launched the crypto cards, we were the first to do so. And we have some innovative products that we are bringing to market that are coming to market first, and we want to keep that momentum going.”
Currently, Bitmama is working on a B2B game where through APIs it can help companies in various industries that want to offer crypto-based services to their users without having to build from scratch. The executives say Bitmama is testing this feature in beta with a number of customers.
The blockchain company will use the pre-seed to expand its operational presence, strengthen its team, consolidate its product offerings and plan for market penetration across Africa, while rapidly scaling up new cryptocurrency use cases across the continent, it said. it in a statement.
Managing general partner at pan-African fund Launch Africa said he sees his firm’s partnership with Bitmama as a way to enable Africans to trade and manage cryptocurrencies and digital assets easily and universally. “This is something we value specifically in our fund and what Bitmama in particular delivers.”