Bitmama, a Nigerian blockchain payments startup, has raised $2 million in pre-seed funding as it expands into new markets.

Africa has the world’s third fastest-growing cryptocurrency market, with adoption increasing by more than 1,200% in the last two years.

Countries such as Nigeria, Kenya, and South Africa are largely to blame for skyrocketing adoption rates as citizens seek to protect themselves from currency depreciation and build wealth.

Despite African governments’ mixed feelings about cryptocurrencies, these countries are home to the majority of the continent’s crypto and blockchain startups. In the most recent development, Bitmama has raised a pre-seed extension of $1.65 million, adding to the $350,000 it received last October, bringing the round total to $2 million.

Unicorn Growth Capital and Launch Africa, both based in Africa, led the investment in Bitmama. Adaverse, Flori Ventures, Tekedia Capital, GreenHouse Capital, ODBA, Five35 Ventures, Chrysalis Capital, Enrich Africa, Thrive Africa, Angellist Ventures, and angel investors Rene Reinsberg, Marek Olszewski, and Honey Ogundeyi are among the others.

The company, which is based in the United States and Nigeria, claims to be working to democratize Africa’s highly fragmented payment system through the use of blockchain-based solutions.

Ruth Iselema, the company’s CEO, founded the Africa-focused blockchain payments startup in 2019. The company’s CTO is Adam Umar, and the COO is Akinbola Asalu. According to the executives, Bitmama began as a WhatsApp group where members learned about cryptocurrency, specifically bitcoin, and transacted. They then built a crypto exchange platform, allowing these users to formally access virtual assets and explore other use cases, such as buying, selling, and swapping crypto and peer-to-peer transactions. Changera, a social payment solution that allows customers to use stablecoins to facilitate remittances and international payments on Netflix and Amazon via virtual cards, was recently introduced by the company.

“We founded Bitmama to make it simple for anyone in Africa to buy and sell cryptocurrency.” But as time passed, we saw a couple of use cases we could solve with this technology,” CEO Iselema told TechCrunch on a conference call. “Many people wanted to make transactions other than buying and selling cryptocurrency, so we built tools that allowed them to buy local and international airtime and data.” Then, because local bank cards have a monthly spend limit of $20, we provided virtual dollar cards for Nigerians to make international purchases.”

According to the company, its Changera virtual crypto debit cards, which are funded with stablecoins, have monthly spending limits of more than $10,000 and “can work anywhere in the world for online transactions.” According to the CEO, Bitmama launched Changera at the intersection of blockchain payments and lifestyle, primarily targeting non-crypto-savvy people who prefer to communicate using platforms with simple UI interfaces and less crypto jargon.

Bitmama had fewer than 20,000 users across both platforms earlier this year. Iselema noted that the number has risen to more than 70,000, and that both products, Bitmama exchange and Changera, have seen massive uptake despite minimal marketing. Revenue is generated by the margins on the transactions that its users conduct on the platform.

African blockchain startups raised $91 million in the first quarter of 2022 alone, compared to $127 million in total investment in 2021. While newcomers in the web3 space such as MARA, Nestcoin, and Jambo have made headlines with novel but unproven business models, exchanges and remittance platforms such as Afriex, Yellow Card, and VALR remain the most well-funded. YC-backed Buycoins, Quidax, and Busha are among the other notable names.

Though Bitmama isn’t one of the continent’s most well-funded blockchain platforms, Iselema asserts that it is one of the most innovative blockchain companies in the world — and the new investment will allow it to be even more tenacious in that regard.

“One of the pillars of Bitmama is that we are very innovative.” “Since we entered the ecosystem, we’ve done a lot of things first,” she explained. “For example, we were the first to introduce QR codes for offline onboarding.” Even when we first introduced crypto cards, we were the first to do so. And we have a couple of innovative products that will be the first on the market, and we want to maintain that momentum.”

Bitmama is currently working on a B2B play in which it can assist businesses in various industries that want to offer crypto-based services to their users without having to build from scratch using APIs.

According to the executives, Bitmama is beta testing this feature with a few clients.

According to a statement, the blockchain company will use the pre-seed to expand its operational presence, strengthen its team, consolidate its product offerings, and plot market penetration across Africa while rapidly scaling new cryptocurrency use cases within the continent.

According to the managing general partner of pan-African fund Launch Africa, the partnership with Bitmama will allow Africans to trade and manage cryptocurrencies and digital assets conveniently and universally. “This is something we particularly value in our fund, and Bitmama in particular delivers on.”