A blockchain payments startup called Bitmama Inc. has raised an extra $1.65 million in pre-seed capital. This came into reality after raising $350,000 in October 2021, and this new fund will put the company’s total fundraising for this round to $2 million. But earlier this year, the startup also came up with a physical crypto card that can be used to pay for things in stores.
According to the startup, the new pre-seed funding will be used to scale up new cryptocurrency use cases across the continent quickly. It will also increase operational presence, team strength across markets, consolidation of product offerings, and market penetration in Africa.
The previous round was led by Unicorn Growth Capital and Launch Africa Ventures. Adaverse and Flori Ventures, which led the company’s previous pre-seed round, also invested in that round. Tekedia Capital, GreenHouse Capital, ODBA, Five35 Ventures, Chrysalis Capital, Enrich Africa, Thrive Africa, Angellist Ventures, and angel investors like CELO founders Rene Reinsberg, Marek Olszewski, and Honey Ogundeyi are among the new investors participating in this round.
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Bitmama Products
At the moment, the company’s main products are the Bitmama exchange, which gives users access to virtual assets and lets them try out different ways to use cryptocurrencies; and Changera, a social payment solution that lets people who don’t know much about cryptocurrencies use their money from anywhere in the world without limits.
Bitmama now works in three African markets: Nigeria, Ghana, and Kenya. Its customers can trade a variety of cryptocurrencies, pay for utilities, and stake as a way to protect themselves from currency depreciation.
Bitmama: Who are they?
The U.S. and Nigeria-based company has built a distributed remote team in Nigeria, Ghana, and Kenya. It says it uses blockchain-based solutions to make Africa’s payment system more accountable to the people.
Ruth Iselema, the CEO, started the blockchain payments company for Africa in 2019.
“Aside from buying and selling crypto, we built stuff that could also let them buy local and international airtime and data. Then, due to local bank card limitations of $20 per month, we provided virtual dollar cards for Nigerians to make international purchases.”
What the company says
Ruth Iselema, founder and CEO of Bitmama Inc., made the following statement in response to the round: “Bitmama has made several strides in the past year. We’ve rolled out two products, which are fast closing in on 100,000 users across the African market and are recording impressive daily active users across our range of product offerings despite the market dynamics. We are building Africa’s most user-friendly, innovative blockchain company, and we are glad to have the backing of seasoned investors and partners who have walked similar turf. We are privileged to learn from their blended experiences across corporate and blockchain business verticals. We are confident of our results, and we’re set to build the next big solution that the market deserves.”
The Growth So Far
The company says that its Changera virtual crypto debit cards, which are paid for with stablecoins, have monthly spending limits of more than $10,000 and “can work anywhere in the world for online transactions.” According to Bitmama’s CEO, Changera was created at the intersection of blockchain payments and lifestyle. It was mostly made for people who don’t know much about cryptocurrency and are more comfortable using platforms with simple user interfaces and less crypto jargon.
Bitmama had fewer than 20,000 users on both platforms at the beginning of this year. Iselema pointed out that the number has increased to over 70,000 and that both platforms, Bitmama exchange and Changera, have had tremendous growth with little promotion. The margin on the transactions that users do on the platform generates revenue.
The Explosive Growth of Blockchain Funding and Cryptocurrency in Africa
Words from the Investors
Janade Du Plessis, Managing General Partner of Launch Africa, also commented on the round:
“As a prominent Pan-African VC fund, we see our partnership with Bitmama as a way to truly allow all Africans with the ability to trade and manage cryptocurrencies and digital assets conveniently and universally, creating a significant impact on allowing more people to trade and transact across Africa. This is something that we specifically value in our fund and what Bitmama in particular delivers.”
Hema Vallabh, Founding Partner of Five35 Ventures, said, “As a leading female-focused VC fund, we at Five35 Ventures look forward to helping Ruth and her dynamic team scale Bitmama, especially with the growth of Changera, the remittance platform that lets all Africans do international transactions at much cheaper rates than established remittance companies on the market.”
Observations
The use of cryptocurrencies in Africa has increased by more than 1,200% over the course of the last two years, making Africa the third fastest-growing cryptocurrency market in the world. People in developing countries like Nigeria, Kenya, and South Africa are trying to build wealth and protect themselves from their currency falling in value. This is a big reason why adoption rates are going up.
Even though African governments have different views on cryptocurrencies, most crypto and blockchain startups are in these countries.