Listen to this article
With the rise of cryptocurrency, many have touted its potential for financial inclusion, especially for underserved users. Kotani Pay, a Nairobi-based crypto payments startup, is making waves in this space, aiming to simplify cross-border remittances for Africa’s vast underbanked populations.
A Significant Pre-Seed Funding
Kotani Pay has successfully closed a $2 million pre-seed funding round, led by P1 Ventures. The round also saw participation from various investors, including DCG/Luno, Flori Ventures, and others. This funding is set to bolster the startup’s mission of facilitating easier remittances across African nations such as Kenya, Ghana, Zambia, South Africa, and more.
The Remittance Landscape in Africa
According to the World Bank, the Sub-Saharan region is projected to receive a whopping $55 billion in remittances this year. In certain African nations, remittances can constitute up to 20% of the GDP. However, the remittance process is plagued by high transfer fees, sometimes taking up to 20% of the transferred amount.
Kotani’s Innovative Solution
Kotani Pay offers a unique solution to these challenges by leveraging blockchain technology. By utilizing stablecoins, which are cryptocurrencies anchored to fiat currencies like the USD, Kotani facilitates international money transfers at a fraction of traditional costs. To enable users to cash out these stablecoins in local currencies, Kotani has ingeniously integrated blockchains with local payment networks.
B2B Focus and Expanding Offerings
Kotani’s primary offering is a B2B solution, connecting crypto platforms’ smart contracts with mobile money APIs. Some of their major partnerships include collaborations with Yellowcard, DCG, Fonbank, Celo’s Valora, Mercy Corps, UNICEF Crypto Innovation Fund, and Stellar. The startup is also set to unveil new products, including Reconset and Money Ledger, following its acquisition of Nigerian startup Fuhlstack.
Regulatory Landscape and Future Prospects
While the crypto regulatory environment is rapidly evolving, Kotani Pay’s CEO, Macharia, remains optimistic about the developments in Africa. With positive regulatory movements in countries like Botswana, Mauritius, and South Africa, and ongoing engagements with regulators in Kenya, Ghana, and Nigeria, the future looks promising for crypto-based solutions like Kotani Pay.
Please email us your feedback and news tips at hello(at)dailycompanynews.com
