Dalelorenzo's GDI Blog
26Mar/210

Afriex raises $1.2M seed to scale its payments and remittances platform across Africa

Sending money from the U.S. to Nigeria can be a painstaking process. For remittance platforms like Western Union, it will cost a carry cost and make between one to five business dates for coin transmit from a U.S. debit card to enter a Nigerian bank account.

Crypto remittance stages are rising to the challenge of correcting these cross-border payment issues by reducing time and costs. Only yesterday, we talked about Flux, a Nigerian fintech solving this problem in the present YC W2 021 quantity. Today, another YC-backed startup, Afriex -- but from the Summer 2020 batch -- is raising a $1.2 million grain round.

The company founded by Tope Alabi and John Obirije in 2019 provides instant, zero-fee movements to Africans at home and in the diaspora. It allows users to deposit cash on the app, cast coin to a bank account or another user, and withdraw fund to a connected bank or debit card.

Like other crypto remittance stages, Afriex has built its business on stablecoins -- cryptocurrency backed by the dollar. In essence, the company buys cryptocurrency in one country and sells it in another to offer better exchange rates. This is in contrast to better-known platforms like Western Union and Wise that use traditional banking systems.

Last year while the startup graduated from YC, it claimed to be processing about $500,000 per month in busines fees and is applicable in over 30 countries. At the time, Afriex was only present in Nigeria and the U.S. But having started actions in Ghana, Kenya, and Uganda, Afriex claims to be processing millions of dollars each month. On the following website, though, Afriex states that customers can only send money to and from Nigeria, Ghana, Kenya, Canada, and the U.S.

With the new financing, the Lagos and San Francisco-based startup is looking to scale up by growing the team and expanding to other markets.

Pan-African VC firm Launch Africa preceded the seed round. Other investors include Y Combinator, SoftBank Opportunity Fund, Future Africa, Brightstone VC, Processus Capital, Uncommon Ventures, A$ AP Capital, Precursor Ventures, and Ivernet Holdings. Angel investors like Russell Smith, Mandela Schumacher-Hodge Dixon, Furqan Rydhan, and Andrea Vaccari also took part.

The SoftBank Opportunity Fund, an owned subsidiary of the SoftBank Group, targets founders of color in the U.S. moving early-stage startups. Since launching in June 2020, it invests in 22 startups and Afriex seems to be the only one catering to a adjust of users in the US and another continent.

SoftBank opens $100 M+ Opportunity Growth Fund to invest in benefactors of shade

This is due to Alabi's upbringing as an immigrant child who has had a mix of both natures. It was difficult to send money to Nigeria and its own experience as a blockchain make at Consensys stimulated him realize he could solve a problem.

“We would go back home every two years and even then, I would always take note of what was missing and what could be enhanced. I would find myself having to pay for foreign expenses with coin that was sitting in a US bank account, ” said Alabi. “Traditional remittance business were so gradual and costly that I knew I could do it better with crypto. Remittance is the best and most important use case for crypto. Our goal is to build the world's largest remittance firm, starting with emerging markets.”

Read more: feedproxy.google.com

26Mar/210

Crypto social network BitClout arrives with a bevy of high profile investors, and skeptics

While much of the recent wave of relentless hype around NFTs — or non-fungible tokens — has been most visibly manifested in high-dollar art auctions or digital trading cards sales, there’s also been a relentless string of chatter among bullish investors who see a future that ties the tokens to the future of social media and creator monetization.

Much of the most spirited conversations have centered on a pre-launch project called BitClout, a social crypto-exchange where users can buy and sell tokens based on people’s reputations. The app, which launches out of private beta tomorrow morning, has already courted plenty of controversy inside the crypto community, but it’s also amassed quite a war chest as investors pump tens of millions into its proprietary currency.

Early backers of the platform’s BitClout currency include a who’s who of Silicon Valley investors including Sequoia Capital and Andreessen Horowitz, the startup’s founder tells TechCrunch. Other investors include Chamath Palihapitiya’s Social Capital, Coinbase Ventures, Winklevoss Capital and Reddit co-founder Alexis Ohanian. A report in Decrypt notes that a single wallet connected to BitClout has received more than $165 million worth of Bitcoin deposits suggesting that huge sums have already poured into the network ahead of its public launch.

BitClout falls into an exploding category of crypto companies that are focusing on tokenized versions of social currency. Others working on building out these individual tokens include Roll and Rally, which aim to allow creators to directly monetize their internet presence and allow their fans to bet on them. Users who believe in a budding artist can invest in their social currency and could earn returns as the creator became more famous and their coins accrued more value.

Why Terry Crews is launching a social currency

“If you look at people’s existing relationships with social media companies, it’s this very adversarial thing where all the content they produce is not really theirs but it belongs to the corporation that doesn’t share the monetization with them,” BitClout’s founder, who refers to themselves pseudonymously as “diamondhands,” tells TechCrunch. (There’s been some speculation on their identity as a former founder in the cryptocurrency space, but in a call with TechCrunch, they would not confirm their identity.)

The BitClout platform revolves around the BitClout currency. At the moment users can deposit Bitcoin into the platform which is instantly converted to BitClout tokens and can then be spent on individual creators inside the network. When a creator gets more popular as more users buy their coin, it gets more expensive to buy denominations of their coin. Creators can also opt in to receive a certain percentage of transactions deposited into their own BitClout wallets so that they continue to benefit from their own success.

The company’s biggest point of controversy hinges on what has been opt-in and what has been opt-out for the early group of accounts on the platform. Most other social currency offerings are strictly opt-in. Users come to the platform in search of a way to create tokens that allow them to monetize a fanbase and build a social fabric across multiple platforms. The thought being that if the platforms own the audience then you are at their mercy.

BitClout has taken an aggressive growth strategy here, turning that model on its head. The startup has pre-populated the BitClout network with 15,000 accounts after scraping information from popular public Twitter profiles. This means that BitClout users can buy shares of Kim Kardashian’s social coin or Elon Musk’s without those individuals ever having signed up for a profile or agreeing to it. This hasn’t been well-received by all of those who unwittingly had accounts set up on their behalf including many crypto-savvy users who got scooped up in the initial wave of seeding.

The startup’s founder says that this effort was largely an effort to prevent handle squatting and user impersonation but he believes that as the platform opens, a sizable pre-purchase of creator coins reserved for the owners of these accounts will entice those users to verify their handles to claim the funds.

Perhaps BitClout’s most eyebrow raising quirk is that the platform is launching with a way to invest into the platform and convert bitcoin into BitClout, but at launch there’s no way to cash out funds. The project’s founder says that it’s only a matter of time before this is resolved, and points to Coinbase and the Winkelvoss twin’s status as coin holders as a sign of future exchange support to come, but the company has no specifics to share at launch.

While the founders and investors behind the project see a bright future for social currencies on the blockchain, many in the decentralized community have been less impressed with BitClout’s early efforts to achieve viral adoption among creators in a permission-less manner.

“BitClout will make a great case study on how badly crypto projects can mess up incentive engineering when they try to monetize social networks.” Jay Graber, a decentralized platform researcher involved in Twitter’s bluesky effort, said in a tweet. “Trust and reputation are key, and if you create a sketchy platform and mess with people’s reputations without their consent it is not going to go well.”

If BitClout comes out of the gate and manages to convert enough of its pre-seeded early adopter list that there is value in joining its closed ecosystem version of a social token then it may have strong early momentum in an explosive new space that many creators are finding valuable. The concepts explored by others in the social currency space are sound, but this particular execution of it is a high-risk one. The network launches tomorrow morning so we’ll see soon enough.

If the question is #bitclout the answer is yes.

— Jordan Belfort (@wolfofwallst) March 20, 2021


Read more: feedproxy.google.com