SA cryptocurrency startup Safcoin wants to create an ecommerce ecosystem in Africa that allows customers to pay for goods and services using cryptocurrency over fiat currency.
Last week the startup launched what its CEO Neil Ferreira calls its first “use-case marketplace”, MobiJobs.Africa — a blockchain platform that connects gig workers and businesses across Africa.
The launch of the platform follows an initial coin offering (ICO) Safcoin ran in 2018 in which the startup raised about R4-million from over 6000 participants, after selling 20 000 Safcoin tokens (against a target of 500 000 tokens), according to Ferreira, who spoke to Ventureburn yesterday. Each token, he said, was worth one ETH at the time.
Safcoin – which was founded by Michela, Tony and Neil Ferreira in 2018 – has launched MobiJobs.Africa
In addition, Ferreira (pictured above, centre with fellow co-founders Tony Ferreira and Michela Ferreira) said the startup has pre-mined five million Safcoins, which it plans to make available for users as part of a customer loyalty or reward system. A further five million would be mined in the coming years, he said.
The startup plans to generate a revenue by charging fees of two percent on bitcoin transactions, and by charging a fee on those that make withdrawal from coin to fiat on crypto trading exchanges (the fee is one percent of a buyer’s transaction as well as an additional fee, the amount for which Ferreira did not specify).
He said that the mining is carried out by close to 100 miners by way of CPU mining, as well as pool mining which is done on the startup’s own machines.
‘700 signups in first four days’
Turning to MobiJobs.Africa, he said about 700 users had signed up to the platform in its first four or five days since the launch.
He said users can create up to five adverts for free, but must pay if they want to create five or more adverts. There is also the option to pay extra to run featured adverts.
The startup plans to aim the platform at university students, he said.
He said between the completion of the ICO, which was followed by a launch of Safcoin in December 2018 and now, the startup has been building its use case all while trading the coin on exchanges.
Safcoin plans to launch a Ugandan office at the end of this month and an office in Botswana thereafter.
Ferreira said the reason for launching in Uganda was that the startup’s platform has integrated with BitPesa’s mobile money, which is in use in Uganda.
The idea with the office in Botswana is that the startup wants to use it as the head office for Africa.
The startup will shortly launch its SafPay payment gateway, which will allow any African business that wants to offer ecommerce facilities on their respective websites, to make use of a Safcoin API. The API will allow merchants to accept bitcoin payments from customers, in place of payment by credit card.
Safcoin is based in the coastal hamlet of Hartenbos in the Western Cape and currently has a full-time team of five.
Ferreira founded the business in 2018 with his wife Michela and brother Tony. All three have previous experience helping set up ecommerce reseller programmes for local small firms.
As ecommerce merchants, small firms are often faced with challenges when using traditional ecommerce. For example their Paypal account can be blocked or orders reversed if a customer complains about a delivery problem.
The startup claims it can get around some of these challenges by using cryptocurrency payments. A payment from a customer is frozen until both the buyer and seller sign off on it. And as it’s sent over the blockchain it can’t be reversed if something goes wrong.
While crypto payments could help solve these challenges, a big challenge for Safcoin will be to help these small businesses to get their customers to pay in crypto tokens, rather than by credit card.
This is likely to be no easy thing, particularly given the scepticism that many the world over hold when it comes to cryptocurrency. The startup has a hard task ahead.
Featured image (left to right): Tony Ferreira, Neil Ferreira and Michela Ferreira (Supplied)