Lagos-based early-stage investor Microtraction announced yesterday that it has invested in Ghanaian fintech startup Bit Sika.
The Accra-based startup provides a money transfer service which uses digital or crypto currencies to enable users to move money across borders at negligible or no fees.
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The investment, which marks Microtraction’s first non-Nigerian investment, is the third transaction it has announced this year.
The investor ordinarily invests $65 000 in two stages. The first investment is usually about $15 000 in exchange for a 7.5% equity stake.
This is followed by an additional $50 000 convertible note at a $1-million valuation cap for companies that Microtraction says have shown “significant progress” after the platform’s initial investment.
Ghanaian fintech Bit Sika was founded in 2018 by Atsu Davoh
Bit Sika was founded last year by Atsu Davoh (pictured above, centre with Bit Sika head of growth Samuel Boahen to his left along with members of Twitter’s team including co-founder and CEO Jack Dorsey, second from right) who dropped out of Carleton College in the US to work on the startup.
Davoh was also one of the first African participants of US tech entrepreneur Daniel Gross’s remote accelerator Pioneer (see this Q&A).
Microtraction explained in a statement yesterday that the first iteration of the startup was a USSD platform which it released in March last year that enabled Africans with basic feature phones to acquire and send Bitcoin between phone numbers without the internet.
Microtraction said the traction Bit Sika’s has achieved each time the startup released a product has given the early-stage investor “a lot of confidence”.
Bit Sika’s USSD platform, it pointed out, attracted over 200 users within 30 hours of being released was able to attract “a few thousand dollars” worth of transactions during its short run.
Microtraction said at the time it invested in the startup, its current version of the product had attracted nearly 1000 users. In addition, the app has processed transactions worth over $860 000 after 12 weeks of operation.
‘Relentless effort on crypto second to none’
Explaining why it backed the Ghanaian fintech, Microtraction said Davoh’s “relentless effort” to spread the adoption of crypto — first with a USSD wallet, then with a crypto-focused charity platform and now with an app focused on cross border payment — is “second to none”.
“The team’s ability to push out products quickly with a laser-focused customer-centric approach is admirable,” said Microtraction.
Microtraction said the present iteration of Bit Sika, which is available on both the Androis and iOS platforms, was built in seven weeks.
“The pilot phase is focused on remittances between Ghana and Nigeria. Their ability to execute and build products fast has been impressive,” said Microtraction.
The early-stage investor also said the Bit Sika team, which includes head of growth Samuel Boahen, is quick to seek advice, open to feedback and judicious in implementing feedback into their product.
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Featured image: Bit Sika founder and CEO Atsu Davoh (middle), Bit Sika head of growth Samuel Boahen (second from left) with Twitter co-founder and CEO Jack Dorsey (second from right) together with members of Twitter’s team (Opentraction)
