Is Crypto Fundraising Bringing New Opportunities to Africa?

LAGOS (Capital Markets in Africa) – Investing in any of the top digital currencies is well above of means of most Africans. For example, one bitcoin in Nigeria values at more than three million naira. This is in a country where around half its population survives on less than 800 naira (just over $2) a day. The minimum wage in Nigeria currently stands at 18,000 naira ($around $60) per month. This situation is reflective of several other countries in Africa.

While the prices of cryptocurrencies such as bitcoin remain out of reach for most Africans, there is a growing urge among many Africans to join the quickly expanding crypto ecosystem. Several are now looking at Initial Coin Offerings (ICOs) as their way into the crypto landscape. Simply put, an ICO gives people from the world over, Africa included, an opportunity to invest in projects with international appeal that are typically less expensive than bitcoin.

ICOs, the world over, have become an unconventional yet popular way of raising funds for startups. In 2017, ICOs managed to rake in more than $3.5 billion. In the African context, where most banks are not forthcoming with loans in cases where founders of startups have little to no capital, ICOs present unparalleled opportunities.

African ICOs
While founders from different countries are turning to ICOs for raising capital, blockchain-based African startups are also joining the bandwagon. African startups such as Humaniq and Cryptogene have already concluded their ICOs successfully and are now in the deployment stage. Here are a few others that are in the limelight now:

• Africunia aims to become the first completely digital blockchain-based open bank. Other than offering regular banking solutions, it aims to integrate crypto startups with conventional banks and carry out bank-to-bank transactions. Tokens issued for its ICO are called AFCASH, and one may use them to avail of the company’s crypto services. Over a period of 10 years, it plans to create 10 billion AFCASH, releasing one billion into circulation annually.
• SureRemit aims to do away with the typically high costs that come with carrying out cross border transfers using traditional companies such as MoneyGram and Western Union. With SureRemit, users can look forward to reduced fees, and it also plans to monitor the spending of funds to do away with mismanagement. It successfully raised around $7 million through its ICO.
• AgreCoin offers a unique solution for people who want to combine their top performing crypto coins under a single portfolio. It also lets users invest in less-than-popular coins that have seemingly good prospects. A total of 50 million tokens were to be issued for its ICO that launched in December 2017.
• Nurucoin is designed to serve as a pan-African cryptocurrency that will foster trade within different parts of the continent. It aims to do away with the typical problem of steep fees charged by middle men when it comes to exchange of currencies within Africa. While Nurucoin has stiff competition, what sets it apart is its distinctly continental approach. Its ICO is now closed.

Conclusion
Crypto fundraising in the form of ICOs has given a number of startups in Africa the ability to put their plans in action. While their numbers pale in comparison to ICOs from Europe or North America, it is only a matter of time that more Africans look at ICOs, not just as a way of raising funds, but also as a means of investment.