The Kenyan fintech startup Kotani Pay has raised $2 million in a pre-seed funding round which was led by P1 Ventures. The capital raised will be used to fund the startup’s expansion into five African countries. Felix Macharia said his firm is working with central banks, some of whom “are actually getting excited about some of these use cases and are getting involved.”

New Capital to Fund Kotani Pay’s Africa Incursion

The Kenya-based digital currency on- and off-ramp service provider, Kotani Pay, recently raised a $2 million pre-seed funding round, a report has said. The round was led by the San Francisco-based seed investor P1 Ventures with the participation of Digital Currency Group/Luno and Flori Ventures.

According to a Techcrunch report, Kotani Pay will use the capital raised to fund its expansion into five African countries: Ivory Coast, Nigeria, Rwanda, Senegal, and Tanzania. The successful capital raise also enables Kotani Pay to make good on its promise to make cross-border remittances much easier for the African continent’s unbanked population.

In addition to seeking to make the transfer of remittances across borders easier, the Kenyan startup is involved in efforts aimed at bringing financial services to Africa’s refugee population. Kotani Pay has also developed software which enables feature phone users to send funds via its platform.

Working With Regulated Entities

While the fintech startup’s use of blockchain and stablecoins when moving funds across borders is likely to attract the attention of regulators, Kotani Pay co-founder Felix Macharia said working with regulated entities has helped to clarify certain things about their operations.

“We either work directly with the local mobile money operators or ride on the charter of regulated partners to ensure that our operations are compliant. Central banks are actually getting excited about some of these use cases and are getting involved as they develop central bank digital currencies,” said Macharia.

The co-founder added that with time more African countries will join the likes of Botswana, Mauritius, and South Africa, which all have put in place regulations to govern digital assets firms.

Register your email here to get a weekly update on African news sent to your inbox:

What are your thoughts on this story? Let us know what you think in the comments section below.