US Investors Lead $2.5M Funding Round In Kenyan Bitcoin Startup BitPesa
BitPesa, a bitcoin payments startup that launched in Kenya in 2013 before expanding in Africa and beyond, has announced a $2.5 million round of funding.
The Series A funding round is led by Silicon Valley-based industry investor Draper VC, along with participation from existing investors, Cryptocoins News reported.
Existing investors in BitPesa include the New York City-based Digital Currency Group, San Francisco-based Blockchain Capital, San Francisco-based Pantera Capital Management, Hong Kong-based BnkToTheFuture, New York City-based Zephyr Acorn and New York City-based FuturePerfectVC.
Based in Los Angeles and New York City, venture capital firm Greycroft LLC joins as a new shareholder and investor.
Series A investors are venture capital funds or angel investors willing to invest and take on the high risk common when investing in startup or early-stage companies, according to Investopedia.
Series A financing is the first round of financing given to a new business once seed capital has already been provided. Typically, this is when external investors are given company ownership for the first time. Funding is commonly offered in the form of preferred stock.
Usually, Series A financing is given when the new venture is generating revenue from its business model, but isn’t yet making a profit.
BitPesa will use the funds for customer acquisition and growing the company in Nigeria — its largest market — said BitPesa CEO Elizabeth Rosielleo. The company also sells bitcoin in Nigeria, Kenya and Uganda, according to a Cryptocoins News report by Samburaj Das.
“We are well on our way to achieving our goal of becoming the largest licensed payment company in the U.K., Europe and Africa that offers real-time settlement at wholesale FX rates to frontier and emerging markets, with best-in-class compliance and customer service,” Rosielleo said.
The funding round will also help BitPesa’s Group Holdings move to Luxembourg. In Europe, the bitcoin payments company is licensed as an authorized payment institution in the U.K. by the Federal Conduct Authority.
BitPesa enables African users to buy and sell local African currencies through bitcoin, with settlements directly transacting to and from bank and mobile money accounts in Africa.
Some of BitPesa’s clients include some of the fastest-scaling wholesale remittance companies and some Fortune 50 social enterprises, Uncova reported.
BitPesa operates in Tanzania, Nigeria, Kenya, Uganda, DRC as well as the U.K. and Senegal, and can do transactions with more than 30 currencies.
As a payments processor, BitPesa’s services facilitates quick and cheap payments between East, Central and West African countries without the need for dated, time-consuming bank wire transfers. On an international scale, BitPesa uses bitcoin to exchange African currencies with other global currencies, negating the need to use the U.S. dollar as the benchmark currency during a foreign exchange.
Previous investment in BitPesa
BitPesa has raised an estimated $5 million-plus in funding since late 2013, CryptoCoin News reported. In February 2015, BitPesa received $1 million in new funding. Bitcoin mining giant BitFury made a “strategic investment” in the company in early 2016.
“BitPesa is well positioned to dominate the huge market opportunity for digital payments across Africa and beyond,” said Tim Draper, lead investor in the latest funding round. “It takes a locally-based team to work in the evolving landscape of frontier market financial services, and BitPesa’s approach to investing in teams, infrastructure, and compliance from Lagos to London gives them a strong advantage.”