African venture capital firm Savannah Fund has made its first investment in a Bitcoin-focused startup, backing BitFinance, a Zimbabwean cryptocurrency exchange that is also developing a crypto ATM yet to be launched.
BitFinance will receive between $20,000 and $30,000 in funding and will participate in a three-month acceleration program that offers coaching and training as part of the investment package, according to Brave New Coin.
The startup joins three others, Djuaji, Forex Kenya, and Podozi, in the fourth cohort of Savannah Fund’s accelerator program. The early-stage fund has already invested in more than 20 startups across six African countries.
Speaking to Cointelegraph, Mbwana Alliy, Managing Partner at Savannah Fund, explained that Bitcoin presents unique solutions for Zimbabwe’s complex financial environment.
“BitFinance interests us because this company tackles concrete problems faced by the population. For example, in Zimbabwe, consumers have to juggle up to 13 legal currencies, making conversions difficult. We are also delighted with the team behind this start-up. These are local people who are experts in technology,” said Alliy.
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Alliy’s interest in Bitcoin dates back years; he first wrote about it for the Savannah Fund blog in early 2013. He believes a digital currency could unify Africa’s fragmented trade and financial landscape.
“Now imagine e-commerce or freelancing services that require a continent-wide or global means of payment: think of collaborative consumption platforms like Airbnb or Odesk, created in Africa, which are starting to be used by pioneers, instead of being used to pay your electricity bills,” he wrote.
He added, “Frankly, it’s just too difficult for companies like Amazon to set up a local sales and billing subsidiary to invoice customers in Zimbabwe; Bitcoin would allow it. In fact, services like PayPal really should, but since their business model relies on working with local banks, they can’t get a foothold here.” — Alliy
Since 2013, several initiatives such as Kenya’s BitPesa, Ghana’s Width, and South Africa’s Ice Cubes have emerged to introduce Bitcoin across Africa. However, its long-term impact on the continent remains uncertain.
Until now, Zimbabwe had no active Bitcoin startups, and BitFinance could help establish Bitcoin as a viable alternative within the country’s troubled financial system and unstable currency environment.
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