Announcing our Investment in HoneyCoin 💛🎉
HoneyCoin provides a global monetisation and peer-to-peer (P2P) remittance platform for African creators and their followers.
Team
- David Nandwa, CEO and CTO: Previously on the Developer Integrations Team at Flutterwave, David is now a serial technical founder with two small exits under his belt. He has built and helped scale an e-commerce startup to $200K+ in ARR. He has also built a consumer SaaS product that currently serves >800,000 users with ~20,000 unique monthly active users (MAUs).
- Dominic Mulinda, Head of Product: Dom has built multiple products that currently serve thousands of users in Europe, Africa, and the US. He was also previously Head of Product at Vorane Studios and Pigeon Shopping.
Problem
Existing creator monetisation platforms such as Gumroad, Buy Me a Coffee (BMC), and Patreon were not built for African creators. This is immediately obvious with the available payment methods and supported currencies on the platforms. Also, withdrawal methods are usually synced to American and European banks and PayPal.
Limited support for African currencies reduces the reach African creators have to transact with each other and their fans. Email newsletter Substack for example only has Stripe as a payments processing partner. What this means is that African creators have to figure out how to get an American bank account, create a manual method for subscription payments processing or allow free access to their content.
Also, the most popular use case for blockchain is cryptocurrency trading. Only a few companies are focused on decentralised applications (DApps) for remittance and monetisation.
Solution
When asked to describe what HoneyCoin does, David always gives this analogy —
“if Coinbase and Patreon had a baby and that baby was born in Africa.”
HoneyCoin provides a fiat and blockchain-backed wallet & monetisation platform for African creators. They provide the financial infrastructure that allows individuals and creators monetise their audiences and transact P2P using fiat (traditional currencies like KES, UGX, NGN) and crypto (digital currencies like BTC, ETH, LTC) channels.
With exorbitant gas fees, high network costs, and long confirmation times, HoneyCoin is pioneering both the affordability and accessibility of crypto through its unique, instant off-chain ledger that allows users to send crypto with zero fees.
From a fiat standpoint, HoneyCoin will provide a wider monetisation network through key partnerships and country-level integrations that make it easier to transact globally with local currencies and payment methods. Users will also be able to withdraw their funds through mobile money (MoMo) and their local bank accounts. HoneyCoin currently supports more than 200 banks and 6 MoMo providers across Africa.
“What we’ve accomplished in a few months of operations is truly incredible and humbling. We started as a bootstrapped, solo-run project and have quickly evolved into a venture-backed company with a small, customer-driven team serving thousands of creators and consumers across 7+ countries globally. Our goal is simple — to build the infrastructure and tooling that makes it easy, fun, and simple to make money doing what you love. Africa is the beachhead on our ambitious expansion plan. It’s an absolute honour to have Microtraction and other amazing investors on board this journey as we build the future of social commerce and monetisation in Africa and beyond!” — David Nandwa, Founder
How it works
HoneyCoin has created an ecosystem of products — HC Creators (a web platform for creators), HC Remit (a fiat remittance app), and Hive Wallet (a non-custodial defi commerce wallet that is compatible with non-custodial adapters like Metamask, Celo Wallet, Albedo, and WalletConnect)
- HC Remit — the fiat remittance app can be accessed via the Google Play Store and iOS App Store.
- Hive Wallet — the non-custodial defi crypto wallet is available on the Google Play Store and iOS App Store. With Hive Wallet, users can top up their virtual card and make purchases using stablecoins. They can also send funds into local bank accounts across Africa from any of their token wallets.
- HC Creators — the dashboard for creators is web-based and is the core platform that handles audience monetisation. First-time users can request Early Access here.
Creators can mint Non-fungible Tokens (NFTs) via Celo, Polygon, Stellar and other L2 chains that solve for issues like having to pay $200+ in gas fees just to mint or purchase an NFT, create other (digital) products and offer services through HoneyCoin’s unique escrow engine. This platform allows creators receive escrow payments — in different crypto wallets and in up to 10+ supported tokens — and create payment links for specific things. They can also view and manage already activated crypto wallets as they would on any other platform.
When fans try to pay using their favourite creator’s payment link, they’re asked to input the amount, email and preferred means of payment — Crypto, MoMo, Debit/Credit Card or Bank Transfer (SWIFT, RTGS, EFT, ACH).
In instances where the user selects ‘Pay with crypto’, they can proceed to choose the specific asset, eg BTC, ETH or XLM. The platform then creates an escrow address and converts the amount from the local currency listed eg KES or NGN to the selected crypto asset. The next page pulls out the user’s balance in the selected token, and pushes a One-Time Password (OTP) to authorise the transaction. The transaction is directly broadcasted and the asset is transferred to the user/fan.
In the future, HoneyCoin is looking to incorporate nuanced creator features such as third party integrations to Google Analytics, LogRocket and ConvertKit, and deep integrations with social media platforms like SnapChat, TikTok, and Instagram.
Market
Sector: Creator Economy/Social Commerce
The most relatable definition of the creator economy is David I. Adeleke’s — an ecosystem of writers, videographers, social media influencers, gamers, podcasters, skit makers, etc., and the software tools and platforms that enable them to build an audience and potentially make money.
Companies like Meta — parent company of Facebook, WhatsApp, and Instagram, and owners of YouTube and TikTok rely on content creators and influencers to drive engagement on their platforms.
While this relationship should be symbiotic, a creator’s ability to monetise content depends on if/when corporate brands reach out to them to negotiate contracts and influencer partnerships. There’s also the constant worry of being demonetised, or worse, deleted without an explanation.
Even though Africa’s Internet Economy is set to be worth $180B by 2025 and CB Insights estimates the global creator economy to be $100B, African creators lack the infrastructural stack to convert their social and creative leverage into real payments from their followers and fans. Startups and financial technology companies, as expected, will lead the way with building these solutions.
The Team
David began writing code for fun as a 10 year old based in Kenya. Mid-adolescence, he realised he could monetise his skills and started building full-fledged applications, simple web apps, and commerce/blockchain solutions. He would then spend time pitching these market-viable builds to businesses that seemed a great fit. Some of these solutions went on to be acquired or implemented as inhouse infrastructure to drive company efficiency.
Monetisation and the potential of defi infrastructure to leapfrog failed legacy systems and create the opportunity for anyone, anywhere to connect with the people they love while making money, especially on the African continent is something David is incredibly passionate about and is his main reason for starting HoneyCoin.
Traction
Since launch, HoneyCoin has grown its transaction volume from <$10,000/month to ~$100,000/month and its monthly revenue to ~$5,000. The company has also secured strategic partnerships with infrastructure and on/off-ramping providers like Ramp OnRamper, Coinprofile, KotaniPay, and Wyre as well as integration agreements with infrastructure providers on the continent like DusuPay and MFS Africa. These relationships are important as they help to significantly reduce the cost and complexities of going from on-chain networks to fiat networks.
Conclusion
Currently available in Nigeria, Kenya, Ghana, Uganda, Tanzania, the UK, Rwanda, and South Africa, HoneyCoin is already bringing more utility to crypto to thousands of users, helping both micro and major creators make money doing what they love, whether that’s selling NFTs or running subscriptions.
While its sights are set on the creator economy, there are alternate use cases. Freelance and remote workers can receive their salary through the platform and users can also send money to their loved ones. Users can also activate virtual cards via the platform which can be used to pay for Amazon purchases, Uber rides, Netflix subscriptions etc — anywhere.
At Microtraction, our long term mission is to accelerate Africa’s transition to a sustainable and developed economy. We do this by investing in entrepreneurs who leverage technology, capital, and innovation to try and solve some of the largest problems on the continent. If you are working on solving one of these problems, we should talk!
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