Overview
This week we’ve got an excellent episode which looks at applying breakthrough technology, to frontier markets.
You’ve probably heard of Bitcoin and blockchain, and here Elizabeth Rossiello CEO and founder of Bitpesa and I discuss how this technology can help African businesses grow through improving how they make international payments.
Why? Well in mature markets there’s a lot of liquidity between different currencies, meaning if you wanted to trade between Euros to Dollars to Pounds, the fact there’s lots of people trading it means you can get a good price.
However, when you are looking to trade African currencies, there’s not so much activity meaning companies are getting caught with high high prices to move money around the world, such as paying suppliers.
Bitpesa has stepped in to provide financial remittance services for anyone wanting to buy or sell African currencies, with Bitcoin and digital currencies acting behind the scenes to smoothen the process.
Just a heads up that this interview took place over an internet call which is different to the in person episodes done to date, and also that Elizabeth will be speaking at The Economist’s Innovation Summit in Nairobi, and so be sure to check that out if you’re interested in learning more.
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The business began 2013
I’d been working with MFIs across Africa. The issue I saw was businesses needing to get financing in local currency.
A way to buy African currency abroad
Is the problem Bitpesa solves. We’ve looked at how technology can solve this problem. B2B quickly became the best use case.
Bitcoin is part of our technology suite
We use Bitcoin as one our digital currencies. 70% of the business touches Bitcoin at some point. “We love using Bitcoin, but we’re not obsessed with it”.
Transferwise is a potential customer
Bitpesa is a market maker in African currencies. It’s brought about from having on the ground operations in all African countries.
Raised $10m
This has spent on physical operations, licences and IP. We use debt financing for inventory float.
Joint ventures weren’t for us
When it comes to growth, whilst it might be quicker to partner with a local company, going forward this isn’t the best way to generate value.
Typical use case
Nigerian pharmacy needing to pay suppliers in Hong Kong. They deposit Nigerian currency and Bitpesa pays out in Hong Kong Dollars.
Digital currencies allow us to extend beyond our reach
When we don’t have a physical bank account, we’ll send money to a broker who will accept, say, Bitcoin.
We’re not caught up in Bitcoin fluctuations
The transaction is executed almost instantaneously, and the risk is also mitigated just like any other broker that’s operates around the world. It’s just a different technology.
There haven’t been many African exits
Which means investors can be unsure about investing in the region. There was also a fizzle of the mobile money innovation in Kenya where regulators got in the way of innovation.
“Advice to regulators: don’t close your eyes to innovation”
You can’t stand in the way of an ocean of innovation. Regulators seem to be receptive to the idea of using Bitcoin and blockchain technology and so I’m excited for this.
I don’t believe there’ll be one mono-currency
And so I’m a firm believer that fiat currencies will remain in 50 different countries – we’ll be there for companies to exchange money in those regions.
Social Media Follows etc.
Website: www.bitpesa.co
Facebook: https://www.facebook.com/bitpesaltd/
Twitter: https://twitter.com/BitPesa
Instagram: https://www.instagram.com/bitpesa/