African Bitcoin Exchange Busha Raises $4.2 Million Seed, Led By Jump Capital
There aren’t many countries where residents feel the effect of inflation and currency devaluation as much as in Nigeria. Grocery prices in the country tend to be markedly higher from month to month, and the result is that many Nigerians, whose income remain stagnant, are constantly looking for alternative ways for making money. This, to some extent, tells the story of why Nigeria has one of the highest crypto adoption rates globally.
For many Nigerians, cryptocurrency isn’t merely a wealth-building tool; it’s a way out. Still, it’s early days for crypto adoption in the West African country, with only a tiny portion of the population currently using digital assets.
Two friends, Michael Adeyeri and Moyo Sodipo, are looking to onboard the next few million Nigerians into the crypto economy.
The duo’s company Busha has raised $4.2 million in a seed round led by Jump Capital. Cadenza Ventures, Blockwall Capital, CMT Digital, Greenhouse Capital and Raba Capital also took part in the round.
Jump Capital recently raised $350 million for its seventh fund. Forbes reported that the venture capital firm is dedicating 40% of the fund to the crypto market.
Commenting on his firm’s investment in Busha, Peter Johnson, a partner at Jump said:
“We believe Nigeria and the African continent are one of the most promising places for crypto to make a significant impact in offering financial freedom to millions of individuals.”
Busha plans to deploy the capital toward product development, growth in Nigeria, expansion to other African countries and talent acquisition. The company expects to set up shops in Ghana, Kenya and a few francophone African countries over the coming months.
Busha launched in 2019 and has silently amassed over 200,000 registered users (not necessarily the active user count). The company’s growth has been driven by the team’s focus on building what their customers want.
“Our approach while building has always been about customer obsession,” said Sodipo, currently Busha’s chief product officer. “We pay so much attention to what our customers want versus what our competitors are doing.”
This has helped Busha build trust with its customers so much so that word of mouth has been an important growth tool for the company.
“We quickly realized that we were acquiring more customers through referrals just because we were delivering the exact kind of services that they want,” Adeyeri, who serves as Busha’s CEO added.
For Busha, being customer-centric involved building a crypto exchange that offered an experience that was as familiar as possible to what’s attainable in Nigeria’s traditional finance sphere.
First, Nigeria is one of the only 56 countries that have enabled real-time payments in some form. Nigeria Inter-Bank Settlement System Plc.—owned by all the licensed banks in the country—runs the technology that facilitates instant bank transfers. Busha sought to replicate this experience from the outset by offering instant deposits into users’ wallets and instant bank withdraws. At the time, Luno, a larger, international crypto exchange, processed withdrawals to Nigerian bank accounts only at certain hours during the day.
In addition, Nigerians tend to favor services that offer real-time, round-the-clock communication, especially when it relates to financial services. Many Nigerian banks offer 24 hours customer support via different channels.
For its part, Busha claims to offer 24-hour live in-app support, with Adeyeri and Sodipo adding that their company was the first Nigerian crypto service to offer round-the-clock withdrawals and live chat.
It remains to be seen if the company can sustain its 24 customer support operations as it onboards the next one million users into the crypto economy.
For now, though, the exchange is building it future based on customer feedback.
“My day to day involves connecting the support and marketing teams with the engineering team to make sure that every feedback that customers give is passed along,” said Sodipo. “We don’t just build based on what we like; we build and ship out features based on what our customers request.”
The next step for Busha is to offer features that make crypto usable, Adeyeri added.
The company recently launched a redesigned app that now allows users to make recurring crypto purchases, which is the basis of the popular dollar-cost averaging investment strategy.
Busha plans to roll out more features over the coming months. In December the exchange will introduce a savings feature that would allow users to earn interest on their crypto.
What’s more, during the first quarter of 2022, the exchange will unveil a spend feature to enable its users spend cryptocurrencies at select online and offline retail outlets.
“We have a partnership with SureGifts [a gift card company] that will allow our customers spend crypto across their merchant network including Spart, Shoprite and Jumia,” Adeyeri said.
Busha isn’t the first or only Nigerian crypto service to tools for spending crypto or making recurring purchases. Bitnob and Accrue already offer dollar-cost averaging features. In addition, Fluidcoin is building out a crypto payment infrastructure.
Nigeria’s crypto landscape continues to be uncertain, with the West African country’s central bank banning financial institutions from doing business with cryptocurrency companies earlier in 2021.Source