Kotani Pay enables Africans to send money home via crypto - highlight unique features in Africa inve...

Highlights

• Nairobi-based Kotani Pay has closed a $2 million pre-seed funding round led by P1 Ventures, with participation from a  number of investors.
• The two-year-old crypto payments startup has a vision to make cross-border remittances easier for the large underbanked populations in Africa.
• Kotani is targeting a use case that concerns the livelihood of hundreds of millions of people including in Kenya, Ghana, Zambia, and South Africa, and plans further expansion into Rwanda, Senegal, Ivory Coast, Tanzania, and Nigeria.

Source: TechCrunch

Our Takeaway

In the past ten years, remittances to Africa have doubled, reaching $100 billion in 2022; higher than foreign aid and investment. In some African countries, they account for as much as 20% of GDP. But in spite of their key role, remittances face high transfer fees, which can be as high as 20% of the amount transferred sometimes. Recognizing the challenges in the traditional money transfer method, Kotani proposes the use of blockchain to facilitate remittances to Africa. Specifically, it’s tapping stablecoins, which are cryptocurrencies pegged to fiat currencies like USD, to move money internationally at a fraction of the costs of the old way.