Nestcoin Raises $6.45M Pre-Seed to Accelerate Crypto and Web3 Adoption in Africa and Frontier Markets – TechCrunch


Africans and people in emerging markets have missed out on the first set of opportunities that technological advancements have brought to the world. Computers, internet, fintech, artificial intelligence, all the technologies you can name (except for mobile technology), people in these areas have always had to catch up.

But new technologies such as cryptography and the web3 give hope to Africans to play a major role in defining what it will look like in the years to come. Nestcoin, a company founded last November that builds, operates and invests in Web3 applications, wants to play a central role in this transition and has raised $6.45 million in pre-seed for this purpose.

The African cryptocurrency market grew by 1,200% to reach $105.6 billion between July 2020 and June 2021, according to research by New York-based research firm Chainalysis. Regional inflation, weak currencies, high unemployment rates, and economic uncertainty are some of the reasons for this growing adoption. With these issues not leaving Africa anytime soon, we should expect stronger crypto growth despite the efforts of several governments to stifle it.

Peer-to-peer transactions and retail are two of the biggest drivers of crypto adoption on the continent. Before launching Nestcoin, founders Yele Bademosi and Taiwo Orilogbon led the charge at Bundle Africa, one of the continent’s well-known crypto trading platforms.

Bademosi was the director of Binance Labs in Africa, overseeing the incubation and development of blockchain projects when he decided to launch Bundle as CEO in 2019. Orilogbon was the company’s chief technology officer.

With Bundle incubated within the ecosystem of the largest crypto exchange, Bademosi had big ambitions for the company. “The goal was to be present in more than 30 African countries and to have millions of users,” he told TechCrunch in an interview.. When he left three years later, Bundle only existed in Nigeria and Ghana with less than 100,000 active users.

Bundle’s numbers may not look impressive from a global perspective, but it’s relative to its peers in Africa that none local encryption platform serving correct Africa has reached one million customers.

Bademosi believes this is because crypto trading alone cannot drive mass adoption of native blockchain and crypto applications. To create products that can reach one million users or several million in the next two years, companies must create applications that are more accessible to ordinary people, which is the basis of web3.

“The first iteration of crypto products were commercial products. The second iteration was more about decentralized finance and non-custodial trading of funding activities,” Bademosi said.

“The current state of crypto, and now more of the apps that ordinary people use and love, whether it’s consumer apps, financial apps, entertainment, games, but these apps now have the potential to reach millions of users in frontier markets, and that’s kind of what we’re trying to do with Nestcoin.

To understand how Nestcoin works is to look at the Digital Currency Group (DCG). The Connecticut-based venture capital and holding company has more than 60 crypto and blockchain subsidiaries and investments in 30 countries, including LUNO, CoinDesk, and Bitso.

However, the difference is that while DCG focuses on western markets and builds products for HNIs and institutional clients with custodial functions, Nestcoin primarily buildsinvests in and operates web3 and noncustodial products that are more accessible to ordinary citizens in frontier markets.

Nestcoin’s products span decentralized finance (DeFi), media, digital art, and gaming.

The company, which Bademosi describes as a venture capital collective, launched its media arm called Breach last year to create small, informative crypto content for the average African. He also set up Metaverse Magna (MVM)a gaming guild that introduces users to the world of crypto games like Axie Infinity.

The NFT-based online video game developed by Sky Mavis has been making a splash since 2020 but is expensive to play. What MVM has done is buy Axies and lend to players in their guild while employing a revenue sharing agreement with them.. In the end, these users can earn up to $1,000 per month, the company said.

Bademosi said MVM has had over 2,000 apps since its launch. yetonly 400 players are currently live on the platform, a number it is looking to increase to 1,000 before next quarter (for context, some of the larger guilds have a player size of around 2,000 at 3 000).

Nestcoin also hopes to present its DeFi projects by the second quarter. in addition For this, the company will explore ways in which content creators on its Breach platform, which has approximately 6,000 subscribers, can earn crypto while educating users with structured learning paths.

The company’s pre-seed round, which is the largest in Nigeria and sub-Saharan Africa at present, will provide it with the firepower to build these products and several others in its pipeline.

Part of the funds will also be used to invest in web3 projects. The company did it in a handful, but the only publicly the leaked deal is in Lazerpay, which allows businesses to accept payments in crypto. He also recently supported AltSchool Africa, an entry-level tech talent project introducing Africans to software engineering and web3 courses like blockchain.

Nestcoin has been involved in other projects like collaboration with the Bitsika crypto exchange platform to launch a social token for Davido, an African music artist. Bademosi said Nestcoin could raise an independent fund to invest and to participate in such future agreements and projects.

That said, there are growing fears that web3 is falling into similar traps for which its enthusiasts blame web2 projects.. Besides centralization, many believe that Web3 projects such as NFTs become expensive to to participate and enriches only a privileged few.

Bademosi disagrees. According to him, crypto trading, the most accessible form of the web3, has been accused of the same problems years ago, but is now cheaper to use.

He referenced his time at Microtraction, a startup investment firm he founded to support African startups in 2017.. The VC invested in YC-backed Buycoins while DCG-backed LUNO was the only company that made it easy for Africans to buy and sell bitcoins.. But today there is a whole ecosystem of companies that make it easier and cheaper to buy other cryptocurrencies and not correct bitcoin he said.

“A lot of those early crypto trading companies didn’t have a lot of users. So, in the same way that you don’t consider crypto trading as a luxury activity, it is correct due to the evolution of the last three to four years,” said the managing director..

He also highlighted the success of Axie Infinity in the Philippines, where thousands of gamers who couldn’t make money from Web2 games are now doing so.. He said if Nestcoin could replicate something similar in Africa, a market with more than 250 million mobile gamers, the wealth to be distributed among millions of people and not a privileged few.

“There is this saying that talent is uniformly distributed, but the opportunity is not. Web3 and crypto are that equalizer between talent distribution and opportunity distribution,” he said.. He hopes to achieve three bold goals with Nestcoin: to have one million users transacting per month, up to 50 million active users per month, and to have one million of those users have over $10,000 in their portfolio.

The company, with team members in nine countries, has onboarded strategic web3 and traditional investors to support its mission. They include Alameda Research, Distributed Global, Alter Global, Serena Ventures, A&T Capital, MSA Capital, 4DX Ventures, Raba Capital,, Old Fashion Research, CMT Digital, Electric Capital, Social Capital, CoinFund, gumi Cryptos Capital and DeFi . Alliance. Local investors in the round include Ventures Platform, Future Africa and Voltron Capital.

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