Africa has achieved yet another milestone in the world of cryptocurrency as the first quarter of 2015 drew to a close. The continent saw the highest amount of venture capital backing so far according to the State of Bitcoin report, which covered the trends of cryptocurrency in the period.
Although Bitpesa, headquartered in Nairobi, Kenya, was the only African cryptocurrency startup to make it into the VC investment section of the report, it was able to raise US$1.1 million from Pantera Capital, Bitcoin Opportunity Corp and Cryptocurrency Partners in its second round of funding. This was the largest amount of capital to ever come into the African cryptocurrency space.
The only startup
Bitpesa is a bitcoin exchange that works with mobile money services such as Mpesa in Kenya and MTN Money in Ghana. It allows its customers to send bitcoins, which is received in the recipient’s mobile money account.
The company started its operations in Kenya in November 2013. It just launched its services in Ghana and is planning to move into the Tanzanian and Ugandan markets.
Indeed, Kenya was among the four new countries on the list that have VC-backed cryptocurrency startups. The others are Barbados, France and Switzerland. It also remains the only African country on the list of 22 countries.
According to Michael Kimani, head of the African Digital Currency Association, this series A funding is beneficial for Bitcoin and the payments ecosystem in Africa, which should open up greater opportunities on the continent.
“No other payments start up here has come close to raising this much (US$1.8 million) in less than 1.5 years of operation. My opinion is that remittances, online payments, B2B cross border payments are some segments ripe for digital currency payments innovation. Obviously, VC investors have taken notice - enough to fork out US$1.1 million."
Increase in global funding
Globally, there was an overall increase in venture capital for cryptocurrency startups of 51% from the last quarter of 2014. However, North America still took more than 73% of the total US$229 million raised, with Silicon Valley startups comprising 59%.
With Bitcoin awareness growing in Africa and startups striving to provide financial services to the millions of unbanked, the continent has plenty of room to grow and we should expect more VC capital influx in the coming quarters.
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