BitPesa, a cryptocurrency based money transfer platform in Africa has redefined buying and selling of frontier currencies in the continent.
In an interview with CNN Marketplace Africa, the company’s founder and CEO Elizabeth Rossiello described to host Eleni Giokos the starting point for BitPesa: “When I heard about bitcoin, a type of cryptocurrency, I thought it was so exciting and interesting. I took 50,000 dollars from an angel investor, met a German development team and a UX team in Kenya, and got the two together. They helped me map out and build a prototype. I then went to my friend at Bloomberg and she wrote a little piece saying “BitPesa Kenyan startup using bitcoin going to compete in the remittance space.” I suddenly went viral, right when the bitcoin price went up to 1,000 dollars, in October or November of 2013.”
Rosiello explained how her company works: “BitPesa is a solution for buying and selling frontier currencies. We started out thinking how we can digitise payments to frontier markets. This means, [for example,] you want to make a payment to a supplier in Korea and you’re in Uganda. We buy the Ugandan shillings and then internationally send bitcoins directly to a Korean bank account. I’ll do that international transfer using bitcoin, and then pay out straight into the local currency account.”
BitPesa faced some challenges when it began, particularly in Kenya, due to competition from Safaricom and the M-Pesa model, which BitPesa is similar to but in the crypto world.
Rosiello describes some of the obstacles her business had to overcome: “We never saw ourselves as competing with M-Pesa, so it was a huge surprise that we ended up having a problem. The reason was we were just too early, they had never heard of bitcoin or blockchain at the time. Looking back, this probably could have been avoided, if it had happened two years later.”
The team at BitPesa learnt from this experience, and approached business in Nigeria with a different mindset; Rosiello explains: “When I went to Nigeria, I was not going to fail. It had to work.
The first thing we did was talk to Central Bank of Nigeria. We went there with a lot of information, a lot of patience. We flew up to Abuja every week, and we were just there to educate. We spent time doing that, and it paid off.”
Rosiello’s persistence was successful, as the company is now growing by around 25 per cent month on month. She tells the programme this level of growth wasn’t something that happened overnight:
“When we started in 2013, it took us about six months to launch the second version of our prototype. We were doing 5,000 dollars a month in transactions in Kenya. It wasn’t really until we launched Uganda and Tanzania that we could expand this into other countries.”
Establishing BitPesa in Nigeria boosted the company’s growth even further: “For us it was really important to break out into West Africa. After launching in Nigeria, we went from 5,000 dollars a month to 100,000 dollars a month. A year later we were at one million dollars a month, now we’re at 20 million dollars a month.”
The programme hears how Rosiello is proud of where BitPesa began and is looking forward to the future: “It’s exciting for us to say we grew out of humble Nairobi roots and across the continent with a team of 60. 50 of them are still in our African offices. And really just saying, into the global class, that we can do it.”