Kotani, Kenya’s 2-year-old crypto remittance startup based is working on creating a seamless cross-border payment process. This payment platform will help Africans who have no access to banks and bank accounts. Kotani is focusing on Kenya, Ghana, Zambia, South Africa, Nigeria, Rwanda, Ivory Coast, Tanzania, and Senegal.
To facilitate quick establishment of the cross-border payment process, Kotani has secured a $2 million pre-seed investment. P1 Ventures led the funding round with investors like DCG/Luno and Flori Ventures.
Kotani realized there were issues in the usual money transfer process. This issues include heavy transfer fees, information imbalance, and currency variation. Due to this, the startup is establishing a seamless way for money transfers, especially for people in remote areas who lack access to banks and internet connection.
Kotani is utilizing blockchain to make an easy way for remittances. The company is making use of stablecoins, cryptocurrencies fixed to flat currencies such as American dollars, to transfer cash globally at a cost that is just a fraction of the old way.
The startup is pushing out its service as a business-to-business (B2B) solution, linking crypto platforms’ smart contracts and also mobile APIs side by side. Yellowcard, DCG, Fonbank, Celo’s Valora, Mercy Corps, UNICEF Crypto Innovation Fund, and Stellar are some of Kotani’s major crypto affiliates.
The co-founder of the startup said, Kotani also allows users to “on-ramp,” or convert their local currencies into USD, a solution that’s tailored more to businesses at the moment but could open to retail users in the future with the required licenses.
The co-founder further said that the process is enabled by a “network of liquidity providers through partnerships with local forex services and money transmitter operators from whom we source local USD.”
Kotani’s platform has performed transfers to the sum of $23 million which are all inbound payments with an average remittance value size of about 150,000 dollars. The startup monetizes through an exchange rate of about 1% of the total transaction size.
Kotani is planning on launching other services such as Reconset which is a Reconciliation-as-a-Service offering, and Money Ledger, a Ledger-as-a-Service solution. This service comes in the wake of Kotani buying Fuhlstack, a Nigerian startup. The acquisition led to Lemuel Okoli, Fuhlstack founder joining Macharia and Samuel Kariuki becoming co-founders of Kotani