The adoption of cryptocurrency in Africa varies regionally. While countries with currently unstable currencies like the naira are seeing immense usage, other regions using the CFA franc have sparse adoption.
A region of more than 200 million people using the CFA franc, Francophone Africa is one of the most crypto-friendly markets in Africa. But only a few players are taking advantage of the market, which can make a case as the next frontier for mobile money and investment apps in Africa.
To that end, Ejara, a one-year-old company founded by Nelly Chatue-Diop, has raised $2 million to pioneer the usage of crypto and investment services in the region.
CoinShares Ventures and Anthemis Group led the round. They are joined by Mercy Corps Ventures, Lateral Capital, LoftyInc Capital and NetX Fund. Two angel investors -- Pascal Gauthier of Ledger and Jason Yanowitz of Blockworks -- and a syndicate social fund also participated.
While founder and CEO Chatue-Diop studied and later held a couple of high executive roles in Europe in the space of 10 years, she had a nudge to come back to Francophone Africa to start a company. That nudge was a culmination of past events mixed with present opportunities.
Growing up in Douala, Cameroon, Chatue-Diop's family experienced a life-changing experience when France devalued the CFA franc in 1994. According to her, this plunged her family (and millions of others) into financial crisis.
"I was really young and we were part of the middle class. Overnight all our savings dwindled and the aftermath was that the government couldn't even pay salaries," she said to TechCrunch over a call. "So even at that tender age, I asked myself how we managed to do everything right and still end up in that zone. So it stayed on my mind."
In 2015, she got acquainted with blockchain and thought it was the perfect technology to solve the problems she faced while growing up. "It helped me understand that people could regain full control over their savings, income and they could protect and grow their wealth," she said.
So, she partnered with a long-time friend and serial entrepreneur, Baptiste Andrieux, to start Ejara in Cameroon and the larger Francophone region.
Typically, cryptocurrencies in Francophone Africa are reserved for a few elites who wish to diversify their assets. Ejara wants to level this playing field for the average French-speaking African so they can invest as little as 5,000 CFA (~$9).
"The built-in transparency and security of the blockchain combined with the popularity of mobile banking in Africa made it clear to me that a blockchain-based mobile investment platform was the key to expanding financial inclusion," said the CEO. "But as all these crypto companies were popping up left and right, I felt very few were speaking to Francophone Africans like myself."
She says crypto was ideal to launch because of what it represents in terms of having full control of one's assets. A recurrent theme that arises when general discussions around cryptocurrencies are made is wallets to use regarding the custody of private keys.
With custodial wallets, third-party companies hold private keys but non-custodial wallets let users own and store their keys. And though the discourse around crypto investing and retail is one of control, custodial wallets, which most crypto platforms in Africa provide, do not provide that much control to users.
Ejara said it is big on security, privacy and ownership, which is why it is taking measures to give non-custodial wallets to its users so they can securely buy, sell, exchange and store their crypto investments.
Yet, the company plans to also diversify into providing other assets, including fractional shares, stocks and commodities.
Ejara has more than 8,000 users from Cameroon, Ivory Coast, Burkina Faso, Mali, Guinea and Senegal, as well as French-speaking Africans in the diaspora (Europe, Asia and the U.S.), and caters to them via a partnership with crypto payment infrastructure company MoonPay so they can remit money to friends and family in Africa. All these were done with zero marketing budget, the CEO said.
Talking about the users, Chatue-Diop classifies them into two groups: the majority who buy crypto to save for future plans and business owners who make frequent transactions.
"In Africa, most people don't have the safety net called retirement fund and some customers use Ejara for that. There are users, moms in particular, that use the platform to invest in their kids' college education. Then we have a tiny portion of the customer base that are wholesalers and do a lot of volumes; they use crypto to finance and buy their goods from overseas suppliers via this method."
The seed investment will see Ejara focus extensively on growth, deployment of features in the company's roadmap and expanding the product and tech team.
Meltem Demirors from CoinShares spoke of the opportunity in Francophone Africa and the dearth of funding in the region. Despite Francophone Africa accounting for about 25% of the continent’s population, she says startups in the region have attracted less than 1% of the venture capital -- but holds that Ejara's funding round offers a glimmer of hope, especially in a largely untapped space as fintech.
"We are excited to work with Nelly and the Ejara team to deliver financial services via non-custodial wallets and offers a new level of trust and transparency to Francophone savers and investors,” Demirors said.
For Anthemis and why they invested, Ruth Foxe Blader, partner at Anthemis, said the firm was particular about how Ejara educates people in Francophone Africa on digital assets and democratizes wealth creation opportunities.