Nigerian blockchain payments startup Bitmama closes $2M pre-seed as it scales to new markets • TechCrunch

Africa is the world’s third fastest growing crypto market, with crypto adoption increasing by more than 1,200% in the past two years. Countries such as Nigeria, Kenya and South Africa are primarily responsible for soaring adoption rates as citizens try to hedge against currency devaluation and build wealth.

Despite African governments’ inconsistent stance on cryptocurrencies, these countries house most of the continent’s crypto and blockchain startups. In the latest development, one such company, Bitmama, has raised a pre-seed round of $1.65 million, adding to the $350,000 it received last October, closing its $2 million round.

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 and Nigeria-based company, which has built a distributed remote team across Nigeria, Ghana and Kenya, says it is working to democratize Africa’s highly fragmented payments system by leveraging blockchain-based solutions.

CEO 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, especially bitcoin, and made transactions. They then built a crypto exchange platform and allowed these users to formally access virtual assets and explore other use cases, including buying, selling and exchanging crypto and peer-to-peer transactions. Recently, the company introduced Changera, a 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 across the African continent to buy and sell cryptocurrency. But as time went on, we saw a couple of use cases we could use this technology to solve,” CEO Iselema told TechCrunch during a phone call. “A lot of people wanted to do transactions apart from buying and selling crypto, so we built things that could also let them buy local and international airtime and data. Then, due to local bank card restrictions of $20 monthly spending, we provided virtual dollar cards for Nigerians to make international purchases.”

Managing director Ruth Iselema

The company says its Changera virtual crypto debit card, funded with stablecoins, has 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 on both platforms. That number has grown to more than 70,000, Iselema noted, adding that both products, Bitmama exchange and Changera, have seen a massive boost with minimal marketing. Income comes from margins on the transactions users carry out on the platform.

African blockchain startups raised $91 million in the first quarter of 2022 alone compared to the $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 , overall, exchange and remittance platforms remain the most supported in the space, such as Afriex, Yellow Card and VALR. Other notable names include YC-backed Buycoins, Quidax and Busha.

Although Bitmama is not among the continent’s most funded blockchain platforms, Iselema boldly claims that it is one of the most innovative blockchain companies out there – and the new investment will allow it to be more tenacious on that front.

“One thing that is the backbone of Bitmama is that we are very innovative. Since we entered the ecosystem, we have done many things where we have been the 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 a couple of innovative products we’re bringing out that will be first to market, and we want to keep that momentum going.”

Bitmama is currently working on a B2B game where, via APIs, it can help businesses in various industries that want to offer crypto-based services to their users without building from scratch. Executives say Bitmama is testing this feature with some clients in beta.

The blockchain company will use the pre-seed to expand its operational presence, strengthen its team, consolidate its product offering and plot market penetration across Africa, while rapidly scaling new cryptocurrency use cases on the continent, it said in a statement.

The managing general partner of pan-African fund Launch Africa said he sees the firm’s partnership with Bitmama as a way to allow Africans to trade and manage cryptocurrencies and digital assets conveniently and universally. “This is something we specifically value in our fund and what Bitmama in particular delivers.”