Nigerian blockchain payments startup Bitmama closes $2M pre-seed as it expands into new markets TechCrunch

Africa is the third fastest growing crypto market in the world, with crypto adoption increasing over 1,200% in the last two years. Countries such as Nigeria, Kenya and South Africa are largely responsible for the sharp rise in adoption rates as citizens try to stave off currency depreciation and generate wealth.

Although African governments do not have a uniform stance on cryptocurrencies, these countries are home to most of the continent’s crypto and blockchain startups. In a recent development, one such company, Bitmama, $1.65 million pre-seed extension, adding to the $350,000 received last October, closing the round with $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, Maek Olszewski and Honey Ogundeyi.

Based in the US and Nigeria, the company has built a remote team spread across Nigeria, Ghana and Kenya and says it is working to democratize Africa’s highly fragmented payments system using blockchain-based solutions.

CEO Ruth Iselema founded an Africa-focused blockchain payments startup in 2019. Adam Umer is the company’s CTO and Akinbola Asalu is the COO. According to the executives, Bitmama started as a WhatsApp group where members learned about crypto, specifically Bitcoin, and made transactions. Next, they built a crypto exchange platform and allowed these users to regularly access virtual assets and explore other use cases, including buying, selling and exchanging crypto and peer-to-peer transactions. More recently, the company introduced Changera, a social payment solution for customers to facilitate payments and payments on virtual cards on Netflix and Amazon using stable currencies.

“We started Bitmama so that anyone on the African continent could buy and sell cryptocurrency. But over time, we saw two use cases that we could use this technology to solve,” CEO Iselema told TechCrunch on a call. So we built things that allow you to buy domestic and international airtime and data, and then offer virtual dollar cards for Nigerians to make international purchases because of the $20 monthly bank card limit.

The company claims that the Changera virtual crypto debit cards, funded by stablecoins, have a monthly spending limit of more than $10,000 and can “work with any online transaction in the world.” According to the CEO, Bitmama launched a changer at the intersection of blockchain payments and lifestyle, mainly targeting non-crypto-savvy people who are more comfortable using basic UI enterprises and social media platforms.

Earlier this year, Bitmama had less than 20,000 users on both platforms. That number has grown to 70,000, Eselema said, with both products, Bitmama Exchange and Changer, seeing significant increases in small transaction volumes. Revenues come from margins on transactions the users make on the platform.

African blockchain startups raised $91 million in the first quarter of 2022 alone, compared to $127 million from investors in 2021. There are new but unproven business models in the Web3 space like MARA, Nestcoin and Jambo. , Exchanges and exchange platforms remain the most supported in the space, for example, Afriex, Yellow Card and VALR. Other popular names include YC-backed Buycoins, Quidax and Busha.

Although Bitmama isn’t one of the continent’s most funded blockchain platforms, Iselema boldly claims it’s one of the most innovative blockchain companies around – and the new investment will allow it to be even stronger on that front.

One thing that is the backbone of Bitmama is that we are very creative. “Since we came into the ecosystem, we have been doing a lot of things where we were the first,” she said. “For example, we are the first to launch QR codes for offline boarding. Even when we launched crypto cards, we were the first to do that. And we’re bringing two new products that are first to market, and we want to keep that momentum going.

Bitmama is currently working on a B2B game where it helps businesses in various industries who want to provide crypto-based services to their users without building them from scratch through APIs. The executives say that Bitmama is beta testing this feature with some customers.

The blockchain company will use the pre-seed to expand its presence, strengthen its team, strengthen its product offerings and market connections across Africa, which is rapidly growing new use cases in the continent, it said in a statement.

The Managing Partner at Pan African Fund Launch Africa said his firm sees its partnership with Bitmama as a way for Africans to conveniently and globally trade and manage cryptocurrencies and digital assets. “This is what we offer in our fund and what Bitmama offers in particular.”

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