Last updated on February 11th, 2015 at 01:17 am
With a second round of funding raising $1.1 million, hedge fund Pantera Capital has taken the lead in advancing startup BitPesa. Also joining BitPesa’s board of directors is Dan Morehead, founder and CEO of Pantera Capital Management LP. The year-old company, based in Nairobi with nine full-time employees, has raised a total of $1.7 million from Crypto Currency Partners, Stephens Investment Management, Bitcoin Opportunity Corp., Future/Perfect Ventures and other investors.
BitPesa’s initial focus was a U.K. – Kenya remittance product but now serves Ghana as well. Plans to add services in Tanzania and Uganda are starting within the next few weeks. BitPesa also works with Give Directly, and other international businesses in the region, to facilitate Bitcoin trading through BitPesa’s platform.
Elizabeth Rossiello, BitPesa’s CEO and co-founder, reports of huge growth during the past year. “BitPesa is just one third of the price of banks and traditional remittance companies, and is the only company filling this market gap in East Africa and now Ghana.” Use of Bitcoin as a medium of transfer results in lower international transfer costs, especially as compared to Western Union’s 10-12% average remittance fee.
Without access to banking services, over two billion people are considered “unbanked”. But with cellphone access, anyone can utilize services like BitPesa, with a flat fee of 3%. The savings could be significant, and BitPesa has set the goal of capturing 1% of the local market.
Cryptocurrencies are proving to be solution to remittance business shortcomings, especially for emerging market users of Western Union, MoneyGram, and WorldRemit. This capital shift towards promising startups, like BitPesa, is an encouraging nod from serious investors to continue its revolutionary growth.