Start-up snapshot: Championing the use of bitcoin in Kenya
Gibson Juma (23) is co-founder of Bitsoko, a Kenya-based bitcoin start-up. He tells How we made it in Africa why he is passionate about bitcoin, and his company’s efforts to build an infrastructure around the cryptocurrency. Below are edited excerpts.
1. Give us your elevator pitch.
Bitsoko is an Android digital wallet that enables you to send money. It is as simple as sending an SMS to another person across the world. Users simply download the app and set their password, top up with bitcoin and send digital currency to other people. They can also pay bills and make purchases from merchants.
We are currently conducting market research in Kenya and Ghana ahead of an official launch later in the year. The market response has been overwhelming over the last year since we launched the beta version. Nearly 30% of our users are from Russia, something we never anticipated. We think we have been getting users from Russia because of the banning and blocking of some bitcoin related websites in the country.
We are one of very few bitcoin setups in Africa, which gives us an advantage. We also have users in the US, South Africa, Britain, South America and of course Kenya. We charge users 0.1% to send any amount of money. Our goal is to generate revenues from payment for services within the wallet. These include payment for utility bills such as electricity, water and airtime, and data bundle charges.
If you have bitcoin in Kenya at the moment there isn’t much you can do with it other than switch them to fiat currencies and vice versa. We are trying to create services around the wallet and sign up merchants to increase trading with bitcoin. We have signed up local businesses including restaurants, cyber cafes, and mama mbogas (roadside vegetable vendors). If you go to a restaurant and pay using bitcoin, the owner of the business will send us the bitcoin and receive mobile money in exchange. We are trying to build the infrastructure around bitcoin, which is lacking here.
2. How did you finance your start-up?
We mostly used our own money. We are incubated at the Kenyatta University Chandaria Business Innovation and Incubation Centre and this has been beneficial for us, especially in having working space and access to reliable internet. The centre also gave us a small amount of funding.
We recently raised a $100,000 research grant from the Bill & Melinda Gates Foundation. We have also received interest from some investors, but they are yet to commit. A software technology start-up doesn’t really need much capital. What you need is to put in a lot of time on your computer, writing and rewriting code. It is only after you have a minimum viable product that you need serious cash.
3. If you were given $1m to invest in your company now, where would it go?
We will perfect the app and hire a team of sales people to recruit more merchants. The money will essentially go towards business development.
4. What risks does your business face?
As with everything new there are issues with legislation. There is a knowledge gap. Innovation comes before legislation, so we are in some sort of experimental phase. We may do something and be told by government tomorrow that we shouldn’t be doing so. That is our main fear. However I should add that Kenya is quite receptive to technology.
5. What has been your biggest mistake, and what have you learnt from it?
I have always been thrilled by bitcoin. But I think my biggest mistake is that I did not get into it sooner. When I first I heard about it, US$1 was enough to buy you 1,300 bitcoins. I was still in university and although I used to write code I wasn’t as serious a programmer as I am now. It looked to me like ‘geek’ money and I thought ‘these guys are just trying to copy our M-Pesa’. Then in 2013 I came across an article saying one bitcoin was now selling for US$1,242. I went nuts. The price of bitcoin had shot up dramatically, in a way you just never hear about with anything else.
6. Describe your most exciting entrepreneurial moment.
It has been exciting watching Bitsoko happen. When we started we were not quite sure about it, but immediately when we got the ball rolling the response was so nice. It is great that people know it and actually use it. I have learnt that when you are starting something it is just you who really knows and believes in the product – and can envision what it will become. In fact you might look stupid to some people, but with time they will get to understand the idea. So if you really believe in an idea, just keep going.