In our last After Office Hours, we had the opportunity of having Christian Duffus host the session. We had a great conversation touching on a number of emerging technologies like blockchain and a whole conversation about cryptocurrency.
“Now is a unique time to build innovative solutions,” said Christian who is the founder and CEO of Fonbnk, a mobile internet access solution that will revolutionize the African digital economy.
From Crypto Winter, his journey in creating a fintech company that is revolutionizing digital economies in emerging markets and how m-pesa paved the way for Fonbnk as well as tips around securing funding. Here are some great take-aways from the session.
While sharing how this was his first time in Africa Christian shared how he conceived the ides of Fonbnk in 2018, when his brother returned from a trip to Kenya with a SIM card connected to M-Pesa, a mobile money service now owned by Safaricom that was launched in 2007 and is used throughout Africa and beyond to transfer both prepaid minutes and financial value.
The SIM card contained airtime, which Duffus sold online, spurring the idea for his next venture; Fonbnk. Fonbnk was later launched in December 2019 and is a blockchain-based marketplace for individuals and businesses around the world to trade prepaid airtime
Through the platform, Fonbnk users can on-ramp on digital money as well as traditional financial services as easily as topping up their mobile phones. Using Fonbnk’s wallet, any of the world’s 8 billion prepaid mobile SIM cards can now be used as a financial OAuth or gateway by the 1.7 billion people globally who are currently unbanked.
According to Duffus, Fonbnk’s is on a mission to develop a global community that empowers people through financial inclusion & leveraging existing distributed and decentralized financial technology as well as a network of mobile phone accounts to enable free access to the internet.
“Decentralized finance technologies are the missing link to expanding broadband access worldwide and unleashing a slew of economic opportunities to the under-represented,” said Duffus.
Crypto assets are potentially changing the international monetary and financial system in profound ways.
The global financial inclusion due to cryptocurrencies can provide access to critical financial products to over 1.7 billion people over the globe who have remained unbanked or underbanked.
It is estimated that the annual GDP will boost by $ 3.7 trillion for emerging economies, it might also reflect froth in an environment of stretched valuations and during the session we looked into how regulators can provide regulation and stability into cryptocurrency.
During the session we also tried to debunk a number of myths spreading out over the years about cryptocurrency. Crypto is a way to provide distributed trust using software that requires minimal human intervention
Over the period, investors in crypto have enjoyed gains while also enduring high volatility in prices. This has brought up new terms like the Crypto Winter, which Duffus advised that the crypto winter shouldn’t be a reason why investors shy away from investing in the space. Crypto winter is a common expression that refers to a poorly performing cryptocurrency market.
Since November 2021, the crypto market has dropped 60% drastically falling from $3 trillion to less than $1 trillion, as of June.This is not the first time a crypto winter has settled over the market though.
The last crypto winter lasted from January 2018 to December 2020. The term was probably first used in 2018 when Bitcoin lost more than half of its market cap, and other cryptos, such as Ethereum and Litecoin (LTC), dropped sharply.
In the long run, Duffus explained that crypto winters might weed out a few companies but they also present an opportunity for top companies to mature and prove their products.
Duffus also touched on the latest seed funding that Fonbnk raised. In March Fonbnk raised $3.5 million in seed funding to help underbanked & underserved users across Africa, Latin America, & Southeast Asia to participate in the digital economy
The oversubscribed seed round was anchored by New York’s New Form Capital, with participation from leading global crypto investors including Kraken Ventures (the investment arm of the largest exchange by BTC euro volume in the world), North Island Ventures (affiliates of leading Asian exchange MEXC Global), crypto-native cross-border investment firm Formless Capital.
On Funding Duffus stated that businesses while seeking funding should actually look into the value that they get from the investors. He explained how he raised his capital a number of times through family and friends. There are many ways of raising capital but most startups will focus on VC Funding; however a large percentage of pre-seed and seed funding also comes from participating in accelerator programs.