Kotani Pay, which offers crypto on-off ramps in several African countries, has closed a $2 million pre-seed funding round led by P1 Ventures.
Also participating in the round were a number of investors including:
- P1 Ventures
- DCG/Luno and
- Flori Ventures,
The Kenyan startup is set to expand its solutions to more African countries, specifically in:
- Rwanda
- Senegal
- Ivory Coast
- Tanzania, and
- Nigeria
So far the startup is said to be operating in Kenya, Ghana, Zambia and South Africa. Here it offers software connecting blockchains to local payment networks where customers can withdraw their funds using USSD (Unstructured Supplementary Service Data) interface.
Kotani’s software is available on a B2B basis with several blockchain products leveraging it to connect their smart contracts to mobile money APIs.
Notable business partners for Kotani include:
Kotani Pay also enables on-ramping cryptocurrency assets from local currencies, a solution that is said to be available to businesses, but the company may look to offer these directly to customers, subsequent to government approval.
Kotani Pay is set to introduce more products including Reconset, a Reconciliation-as-a-Service offering, and Money Ledger, a Ledger-as-a-Service solution, after acquiring Fuhlstack, a Nigerian startup. Fuhlstack founder, Lemuel Okoli, joins Macharia and Samuel Kariuki as Kotani Pay Co-Founders.
On the regulatory front, the company is more hopeful than ever with more African authorities becoming more open to cryptocurrencies, notably CBDCs which seem to have similar benefits to Kotani’s solutions.
“We are seeing positive developments in the Southern part of Africa with Botswana, Mauritius and South Africa all launching Virtual Asset Service Provider Licenses that regulate digital assets fintechs. MiCa passed by the European Union parliament is another positive development as it regulates stablecoin issuers, on ramps and off ramps, and exchanges,” said Kotani Pay Co-Founder, Macharia.
“Based on our engagement with regulators in Kenya such as the Capital Markets Authority, we believe it’s just a matter of time before other markets like Kenya, Ghana, Nigeria catch up.”
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