Kenyan bitcoin payments startup BitPesa has raised follow-on funding from a number of investors to take its total secured investment to around the US$10 million mark.
BitPesa, which launched in Kenya in 2013 and also operates in Nigeria, Tanzania, Uganda, the DRC, the UK and Senegal, raised a US$2.5 million Series A round in January and has now secured a follow-on round led by VC firm Greycroft Partners.
Plug and Play is another new investor, while a number of previous backers have also injected new funds, including Draper Associates, Pantera Capital and Digital Currency Group.
Founder and chief executive officer (CEO) Elizabeth Rossiello said BitPesa kept raising because it had grown above and beyond projections, having seen 25 per cent month-on-month growth for nearly two years.
“We have expanded across Africa and Europe, added a stellar roster of Fortune 100 companies as clients and are receiving growing support from regulators. Global companies trading in Africa see the immediate value and efficiency of using BitPesa, as they know the pain of using existing cross-border payment services in these markets,” she said.
“Bitcoin and cryptocurrency will play an important role in the payments and money transfer industries and even more so in the developing world for which BitPesa is ideally positioned,” said Alan Patricof, founder and managing director of Greycroft.
“BitPesa promises to revolutionise the exchange and payment markets in Africa, disrupting monopoly incumbents and opening the fastest growing economies in the world to foreign companies. We’re very excited for the team’s vision and current execution which bolsters payment avenues throughout the region,” said Scott Robinson, vice president at Plug and Play.
Rossiello told Disrupt Africa separately that BitPesa would use the funding to continue actively moving into adjacent products that support its B2B clients, such as trade finance and lending.
“We are working with partners on this and our lean, adaptive technology platform helps us seamlessly integrate with other cutting-edge partners,” she said.
“We are looking for banks and MNOs to continue to partner with in each region. Many have been reluctant to work with startups that use bitcoin technology in the past, but as the FCA announced it is OK with its licensed payment companies using bitcoin technology and Japan making bitcoin legal tender igniting a boom of investment from Japanese financial institutions, the global trend must also now reach African banks and MNOs.”
This comes at a time when BitPesa is banned from operating in Kenya, the country in which it first launched, by a directive from the Central Bank of Kenya (CBK) saying bitcoin was illegal.
“We have been working closely with the Nigerian Central Bank and have a great dialogue with other Central Banks in East, Central and West Africa, but we have still made little progress in Kenya, which remains the strictest jurisdiction in Africa, having gone out of its way to ban any bank from banking or partnering with companies using this technology,” Rossiello said.
“While BitPesa is still a tax-paying, registered Kenyan company with a large office for its finance, trading, customer support and sales functions for the region, it is blocked from servicing Kenyan customers. This is a total shame, given that the company and the African bitcoin boom it started when it launched, began in Kenya.”