Kenya-based crypto payments startup, Kotani Pay has secured $2 million in a pre-seed funding round to help bolster its cross-border remittance solutions in Africa.
Kotani Pay seeks to address various challenges in the banking sector in Africa such as limited access and high transaction fees. To do this, Kotani leverages stablecoins to make cross-border remittances easier, even without requiring internet access. Its payment platform allows users to convert various stablecoins to a list of local currencies. Kotani’s payment solutions are currently available in Kenya, Ghana, Zambia and South Africa.
There remains a huge population on the continent without internet access. This poses a challenge especially since most Fintech solutions require a connection to the internet for users to benefit from their technologies. To address this, Kotani provides a middleware that connects various blockchain solutions to local payment networks facilitated by USSD communication protocol.
Kotani offers its solutions through a B2B model, connecting major crypto platforms to local payment channels such as mobile money APIs. The startup monetizes by charging a transaction fee which varies depending on the amount transacted and the payment method used.
The startup aims to further expand its offerings by introducing other products including Money Ledger (a Ledger-as-a-Service solution) and Reconset (a Reconciliation-as-a-Service solution) following its acquisition of Nigeria-based Fintech startup, Fuhlstack. In addition, Kotani plans to expand to other regions on the continent including Tanzania, Rwanda, Senegal, Ivory Coast, and Nigeria.
With the World Bank projecting that the Sub-Saharan Africa region will receive an estimated $55 billion in remittance this year, Kotani may seek to tap into this market and provide affordable cross-border payment solutions to the underserved in the region.
