Nigerian based early stage tech investor, Microtraction, has announced its first non-Nigerian investment, which is Ghanaian based money transfer startup – Bit Sika.
Though Microtraction did not mention the amount, the company usually invests in two stages – firstly, $15,000 for 7.5% equity stake, followed by an additional $50,000 convertible note at a $1 million valuation cap in companies that show significant progress after our initial investment.
So it is safe to assume that this investment is $15,000.
Founded in 2018 by CEO and founder, Atsu Davoh, Bit Sika helps Africans instantly receive money from anyone on earth at no fees via an app.
Bit Sika has created a platform that uses digital currencies to move money across borders at negligible/no fees. Users can deposit and remit money across multiple currencies using the app. All monies deposited in Bit Sika are stored in USD credits/stable-coin. This means that, once your Bit Sika balance is not used, the USD value of your balance never changes. This serves as a better store-of-value against African local currencies. No other app in the market offers this to its users.
Commenting on the market, Microtraction in its post, stated that,
Africa is the most expensive place to send money in the world. Research has shown that digitizing the remittance value chain from the sender to the receiver and removing the dependency on agents will help reduce the transaction costs of sending money to Africa.
Remittances to sub-Saharan Africa grew to $37.8 billion in 2017, according to the World Bank and are forecast to hit around $39.2 billion this year and $39.6 billion in 2019. Unsurprisingly, as the largest population and economy, Nigeria topped African recipients with $22.3 billion in 2017. Liberia was the African country for whom remittances accounted for the highest share of GDP at 25.9%. The Financial Times reported that remittances between Ghana and Nigeria alone stood at $1.2 billion in 2017
Spending money is a nightmare when people travel across African countries. ATM’s can only help with cash withdrawals. Cross continent peer-to-peer money transfer is challenging and many shops/merchants do not accept international cards. By using digital currencies and distributed ledger technology (specifically blockchain), Bit Sika is making cross-border payments negligible in cost, instant and auditable.
Currently, Bit Sika’s platform allows for money transfer between Nigeria and Ghana. After launch, the app attracted nearly 1000 users and it has processed a total volume of over $860,000 in transactions after 12 weeks of operation.
Within the last one year, Microtraction has invested in SendBox, Riby and Wallet.ng
