Africans and people in emerging markets missed out on the first set of opportunities that technological advancements brought to the world. Computers, the internet, fintech, artificial intelligence, any tech you can name (except mobile tech) people in these regions have always had to play catch up.
But new technologies such as crypto and web3 provide hope to Africans to play a massive role in defining what it looks like in years to come. Nestcoin, a company founded last November that builds, operates, and invests in web3 applications, wants to be pivotal in this transition and has raised $6.4 million pre-seed to that end.
Africa’s cryptocurrency market grew by 1,200% to $105.6 billion between July 2020 and June 2021, per research by New-York based research firm Chainalysis. Regional inflation, weak currencies, high unemployment rates, and economic uncertainty are a couple of reasons behind this growing adoption. With these issues not leaving Africa anytime soon, we should expect stronger crypto growth despite several governments’ efforts to stifle it.
Peer to peer transactions and retail trading are two of the biggest drivers of crypto adoption on the continent. Before starting Nestcoin, founders Yele Bademosi and Taiwo Orilogbon led the charge at Bundle Africa, one of the continent’s well-known crypto trading platforms.
Bademosi was the Director of Binance Labs in Africa, overseeing the incubation and development of blockchain projects when he decided to start Bundle as CEO in 2019. Orilogbon was the company’s chief technology officer.
With Bundle incubated within the ecosystem of the largest crypto exchange platform, Bademosi had lofty ambitions for the company. “The goal was to be present in 30-plus African countries and have millions of users,” he told TechCrunch in an interview. By the time he left, three years after, Bundle was only live in Nigeria and Ghana with less than 100,000 active users.
Bundle’s numbers might not seem impressive from a global standpoint, but when compared with its peers in Africa, it’s somewhat standard. No local crypto platform serving just Africa has reached a million customers.
Bademosi thinks this is because crypto trading alone cannot drive mass adoption of blockchain and crypto native applications. To create products that can scale to a million users or several million in the next couple of years, companies should build applications that are more accessible for the everyday person, which is the basics of web3.
“The first iteration of crypto products were trading products. The second iteration has been more around like decentralized finance and non-custodial trading of financing activities,” said Bademosi.
“The current situation of crypto, and now more like applications that everyday people use and love, whether it is like consumer applications, finance apps, entertainment, gaming, but these applications now have potential to reach millions of users across frontier markets. And that’s sort of what we are trying to do with Nestcoin.”
To understand how Nestcoin works is to look at the Digital Currency Group (DCG). The Connecticut-based venture capital and holding company has over 60 crypto and blockchain subsidiaries and investments across 30 countries, including LUNO, CoinDesk and Bitso.
However, the difference is that while DCG focuses on western markets and building products for HNIs and institutional clients with custodial features, Nestcoin primarily builds, invest, and operates web3 and non-custodial products that are more accessible for everyday people in frontier markets.
Nestcoin’s products cut across Decentralized Finance (DeFi), media, digital art and gaming.
The company, which Bademosi describes as a venture collective, launched its media arm called Breach last year to create bite-sized and informative crypto content for the average African. It also set up Metaverse Magna (MVM) , a gaming guild that introduces users to the world of play-to-earn crypto-powered games like Axie Infinity.
The NFT-based online video game developed by Sky Mavis has been a sensation since 2020 but is expensive to play. What MVM has done is to buy Axies and lend to players in its guild while employing a revenue-sharing agreement with them. In the end, these users can earn up to $1,000 monthly, the company said.
Bademosi said MVM has had more than 2,000 applications since its launch. However, only 400 gamers are currently live on the platform, a number he’s looking to increase to 1,000 before next quarter (for context, some of the largest Guilds have a player size of around 2,000 to 3,000).
Nestcoin also hopes to introduce its DeFi projects by Q2. In addition to that, the company will be exploring ways in which content creators on its Breach platform, which has around 5,000 subscribers, can earn crypto while educating users with structured learning paths.
The company’s pre-seed […]
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