Nigerian Blockchain Payments Fintech Start-up Bitmama Raises $2M Pre-seed Funding For Expansion.
Blockchain based payment services company, Bitmama has raised a pre-seed extension of $1.65 million, adding to the $350,000 it received last October, thus, closing the round at $2 million.
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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 U.S.- and Nigeria-based company, which has built a distributed remote team across Nigeria, Ghana and Kenya, says it’s working to democratize Africa’s highly fragmented payment system by leveraging blockchain-based solutions.
Chief executive officer Ruth Iselema founded the Africa-focused blockchain payments startup in 2019. Adam Umar 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, particularly bitcoin, and made transactions. Subsequently, they built a crypto exchange platform and allowed these users to access virtual assets formally and explore other use cases, including buying, selling and swapping crypto and peer-to-peer transactions. More recently, the company introduced Changera, a social payment solution allowing customers to use stablecoins to facilitate remittances and international payments on Netflix and Amazon via virtual cards.
“We started Bitmama to make it easy for anyone across the African continent to buy and sell cryptocurrency. But as time passed, we saw a couple of use cases we could employ this technology to solve,” CEO Iselema said. “Many people wanted to make transactions asides from buying and selling of crypto, so we built stuff that could also let them buy local and international airtime and data. Then, due to local bank card limitations of $20 monthly spend, we provided virtual dollar cards for Nigerians to make international purchases.”
The company says its Changera virtual crypto debit cards, funded with stablecoins, have over $10,000 in monthly spending limits and “can work anywhere in the world for online transactions.” 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 basic UI interfaces and less crypto jargon to communicate.
Earlier this year, Bitmama had fewer than 20,000 users across both platforms. That number has grown to more than 70,000, noted Iselema, adding that both products, Bitmama exchange and Changera, have seen massive uptake with minimal marketing. Revenues come from margins on the transactions its users perform on the platform.
African blockchain startups raised $91 million in the first quarter of 2022 alone compared to $127 million they received from investors throughout 2021. While new upstarts in the web3 space such as MARA, Nestcoin and Jambo have grabbed the headlines with new but unproven business models, collectively, exchanges and remittance platforms remain the most backed in the space, for example, Afriex, Yellow Card and VALR. Other notable names include YC-backed Buycoins, Quidax and Busha.