Kenya’s BitPesa Raises $1.1 Million, Expands Operations

By PAUL VIGNA and MICHAEL J. CASEY for Wall Street Journal

BitPesa, the Nairobi-based startup that’s taken aim at the global remittance business, announced that it’s raised $1.1 million in a second round of funding led by San Francisco-based Pantera Capital. Dan Morehead, Pantera’s CEO and founder, joined the startup’s board of directors.

Other investors included Crypto Currency Partners, Stephens Investment Management, Bitcoin Opportunity Corp., and Future/Perfect Ventures. The company, which recently celebrated its one-year anniversary, has raised a total of $1.7 million.

“We’ve learned a lot, and we’re growing,” Elizabeth Rossiello, BitPesa’s CEO and co-founder, told MoneyBeat. The company now has a staff of nine full-time employees and has expanded its services beyond the remittance business. “We’re surprised ourselves about how many people are excited about it.”

BitPesa launched its remittance business last spring, beginning with only the U.K.-Kenya “corridor,” and expanding out from there. It’s operating in Ghana and plans to start offering its services in Tanzania and Uganda in the first quarter.

“This whole year has been a really big learning curve,” she said.

The firm now offers a brokerage service, buying and selling bitcoin on behalf of customers, and discovered that its remittance service is collared to some extent by how easy or hard, how cheap or expense, it is for expats to buy bitcoins in their host countries. Canada’s become a big market for them, Ms. Rossiello said because buying bitcoin there is easy. Conversely, the U.K. has been more difficult. “It gives us a hint about where to move next.”

The remittance business and emerging markets are one of the most promising fields for cryptocurrencies, at least so far as providing both a legitimate business case and a social good. There are more than two billion people considered “unbanked,” without access to banking services. Anyone with access to a cellphone, however, can potentially access services like BitPesa. It remains a small slice of the overall business – BitPesa hasn’t yet reached its goal of capturing 1% of the local market. But it is, as Ms. Rossiello pointed out, growing and receiving funding from the likes of Pantera is a sign that big players in the digital-currency world are taking it seriously. (Paul Vigna)

AFP/Getty Images

– Our colleagues over at the Journal Reports team are taking an interest in cryptocurrencies. They’re planning to cover the space in a special report that will run in a few weeks (March 2), and as part of that, they’re asking for our – well, your, really – help.

The team is asking what you think on the issue of cryptocurrencies: do they have a future? While the poll question itself is a yes-or-no question, the poll includes a field for comments, so this is your chance to make your case for, or against, bitcoin and its peers.

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