This week we’re kicking of a mini-series on high-tech for business within a developing country context. We’re talking to Elizabeth Rossiello, who co-founded BitPesa Ltd in 2014 and serves as its Chief Executive Officer. Elizabeth has worked in Kenya as a Microfinance Analyst and Investment Associate since 2009. She is an expert in East African financial product development and establishing best practices in risk, governance and IT for local banks. Prior to her work in East Africa, she served as an Analyst at Credit Suisse in Zurich and a Robert Bosch Fellow in Frankfurt. She speaks four languages and has a Masters in International Finance from Columbia University’s SIPA.
On this episode you’ll learn:
- Cryptocurrency can be compared to how letters (snail mail) used to be sent to another country, and now email has replaced that. Cryptocurrency, or Bitcoin, was created to replace the traditional way of sending money to another person. Bitpesa is sending money around the world a lot cheaper than traditional means. They’re increasing liquidity for companies.
- Bitpesa’s business model is to take a small percentage on each international money transfer transaction.
- Bitpesa doesn’t hold Bitcoin overnight so they’re not affected by the fluctuating price that the currency has seen.
- Elizabeth built the simplest test case of how it could work. She hired one engineer and one UX (User Experience) team. They built it on the Mpesa system in Kenya to test it out. It took a month and a half. Their first customer traded in January 2014, and they relaunched in April with a market-ready product.
- The regulatory framework was setup for traditional money transfers, but Bitpesa showed they were doing the same thing just using a different tool to do so.
- Working with regulators still makes up part of their work today. It’s about ensuring they’re following the rules, and keeping the focus away from what the technology is.
- They’ve had plenty of setbacks, such as being sued by Safaricom in Kenya, and potential investors who learnt from their company and ended up creating something similar.
- Bitpesa started out on a small $50k seed investment which they used to build the prototype, and then raised follow on investment from international investors. Follow on investors were only willing to put in cash for 6-12 months runway, so Elizabeth says it was a really inefficient fundraising process.
- Elizabeth advises to enjoy the ride, because it’s a long journey. Enjoy building a company that you want to work for. And take care of yourself along the way.
Links to resources:
- Blockchain for Development: Emerging Opportunities for Mobile, Identity and Aid, a 2017 report from the GSMA Digital Identity Programme, which talks about the potential for blockchain for numerous use cases, including for identification and payment transparency.
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