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Binance Spinoff Aims To Be Bitcoin-Powered Venmo Of Africa

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Bundle CEO Yele Bademosi has a plan to connect the entire continent of Africa to global finance us bitcoin and other cryptocurrencies. BUNDLE / YUSUF

Yele Bademosi is passionate about helping his home continent of Africa. Born into a missionary home in Ibadan, Nigeria, Bademosi’s mother and father used to deliver medical services and bibles to the Yoruba tribes-people in the forests surrounding his home-town, often going from hut to hut. When he and his sisters were old enough, they helped. “That is my earliest memory in terms of thinking about how to give back,” he says, “But as I grew older, I changed my views to thinking about, how do you actually help people at scale?” 

Last year, Bademosi became a director at the venture capital arm of the world’s largest cryptocurrency exchange Binance, which trades $1.5 billion in crypto assets each day. And today he is excited because he’s launching Bundle, one of six African startups the Malta-based crypto exchange is now funding, and the first it launched. The startup is being run by Africans in an effort to get Africans to use cryptocurrency, not as an investment vehicle, but as a global means of exchange. Bundle is essentially a social payments app, similar to Venmo or Square’s Cash App.

It lets users send, receive and spend bitcoin, ether, and Nigerian naira with little more than the recipient’s phone number. Unlike Square though, Bundle will also let users spend Binance coin (BNB), the exchange’s native cryptocurrency, which has been doled out to loyal and active traders using its crypto exchange. In the near future they’ll be able to spend and (more importantly) save Binance U.S. dollars (BUSD), stablecoins backed by U.S. dollars and regulated in the United States.

Bundle joins numerous tech giants working on ventures in Africa. Facebook intends to co-launch a cryptocurrency targeting the unbanked and Square’s founder Jack Dorsey recently announced plans to immigrate to the continent. “Regardless of your geography, you should have access to the best financial services. And unfortunately, your geography today defines the quality of financial services that you have,” says Bademosi, who is also Bundle’s CEO. “The same way the internet created freedom of information, I think blockchains create freedom of quality of financial services.”

Born in 1991, the only boy among five sisters, Bademosi always knew entrepreneurship was in his future. Perhaps rebelling from his bossy sisters, he knew he didn’t want to work for others. Bademosi’s first experience with a computer was at an internet cafe. As a child, he’d walk up a flight of stairs to the second floor of his local shopping center, push open a sliding door and frantically scan for cheat codes to his favorite computer games in 30-minute chunks, before his money ran out.

It wasn’t until 2007, when Bademosi was 16-years-old, that he finally got his first computer, an Acer Aspire One Series his parents got for him when he started classes at Lansdowne College, a preparatory school for University, similar to a high-school, in Westminster, England. For the first time, he had unlimited online access and an outlet to focus his burgeoning interests. By the time he graduated two years later, the 6’ 6” Bademosi had not only competed on the school’s football and basketball teams, but studied biology, chemistry, psychology and mathematics. “There’s a huge difference between what you learn in college in a structured environment and what you can learn online,” he says. “It felt like what I imagined the Enlightenment period felt like for people who lived when the printing press was first available.” 

Growing up in Nigeria, he says, meant that students who did well in school were pushed into the sciences. When his youngest sister decided to go into economics, or what he called “liberal-type accounting,” he was in shock. In spite of his entrepreneurial aspirations, he knew he would be expected to either to become a medical doctor like his father, an engineer or an architect. He hated physics though, so passed on engineering, and architecture was out because as he put it, “I couldn’t draw straight lines.” His father convinced him that even if he didn’t end up practicing medicine, the University of London’s accelerated three-year program meant he’d have extra time afterwards to find a path of his own, and he enrolled in 2009.

In his first year of medical school his father died of kidney-failure. His father’s death gave him the courage to rebel. He had always found that he was more interested in computers than medicine so he dropped out of medical school with plans to build apps for Apple’s OS. After a few unsuccessful months building a social media app Bademosi flew back to Nigeria.

Yele Bademosi, Bundle
Bademosi works in his company’s office. BINANCE / YUSUF

There he got a job as manager of Starta, devoted to helping African companies get off the ground by providing education, tools, and networking opportunities. After developing a taste for helping startups get off the ground, Bademosi founded his own angel investing firm called Mircotraction. His venture had well connected backers: Nigerian energy and real estate tycoon, Tunde Folawiyo; the CEO of Y-Combinator, Michael Siebel, and Google’s head of ecosystem for sub-Saharan Africa, Andy Volk.

Lagos-based Microtraction is now among the most active investors in Western Africa, having funded 15 companies, including 54gene, an African genomics research startup that recently attracted $15 million from Adjuvant Capital, Y-Combinator and others.

Bademosi had learned about bitcoin in college but it wasn’t until 2017 after he read a book called Master Switch by Columbia professor Tim Wu, that he began to see blockchain as a way to let networks of individuals compete against the likes of Facebook, Amazon, Google, and Apple using a shared technology infrastructure. “We’re not there yet,” he says. ‘But I believe that blockchain and decentralized technologies can open up the internet again, and create a new playing field that new entrants could play on.”

While the jump from medicine to blockchain may seem big , Bademosi sees them as strongly related. “The similarity really is the fact that you have individual organisms, whether that’s a cell or a human or a computer, acting in their own best interests towards what’s still a common goal, and there are a bunch of rules they all have to obey.”

Just a few months after founding Microtraction in August 2017, Bademosi bought his first bitcoin and as its price fluctuated wildly he became hooked on crypto asset investing. That led him to Binance, which was, founded in China, and is now doing business from Malta. In November 2018, Binance published a ten-point thesis on why it was dedicated to the continent and launched a subsidiary in Uganda. Number four on Binance’s list was Bademosi’s childhood mantra: scalability. 

“For me, blockchains are as big as the internet,” says Bademosi. “And can you imagine Bill Gates or Larry Page or, Mark, Zuckerberg coming to Africa less than one year after the company was started?” He was impressed. So much so, that by January 2019, he had pitched his vision for what Binance should be doing in Africa and instead of taking him up on his advice, the company hired him, making him the first director at Binance Labs focused on investing in Africa-based blockchain startups and leading the Africa chapter of the organization’s incubation program.

So far Binance Labs has invested in five African startups, one from South Africa, one from Kenya, one from Ghana and three from Nigeria, all serving different aspects of the content’s growing crypto economy. Notably, Lagos-based Yellow Card is a way to buy bitcoin even without a bank via local agents, and Flutterwave is the same fiat-to-crypto bridge that lets Binance customers buy cryptocurrency with naira.

Bundle team
Bundle backend engineer Kenny Shittu (left) meets with blockchain engineer Oluchi Enebeli, user experience designer Ugo Ifezue, backend engineer Seyi Ajonibode and operations associate Chinny Eze at Bundle’s offices on March 9, 2020
 
BUNDLE / YUSUF

Binance and its new Bundle have Western competitors in Africa. Facebook’s Libra has its sights set on banking the unbanked. Another potential competitor using cryptocurrency to serve the unbanked is Akon, the Senegalese-American musician whose Akoin project announced recently that it would be the exclusive currency of the Mwale Medical Technology City in Kenya. “Our goal is for akoin to be the official currency of the continent,” says Akon.

To give an idea of the total market up for grabs here, even if the average account holder might only own a fraction of what Western banks require to open an account, the World Bank estimates that 1.7 billion adults around the world are without such access. Fifty-seven percent of adults in sub-Saharan African, or about 350 million people, don’t have bank accounts, according to the World Bank. To help close that gap nearly $700 million was invested in fintech in Africa last year, according to media firm WeeTracker. Of the 1.2 billion people living in Africa, Bademosi estimates only 1.4 million are already using crypto. 

In two weeks Bundle expects to add BUSD, a stablecoin pegged to the U.S. dollar, created by blockchain startup Paxos, regulated by the New York Department of Financial Services, and spendable anywhere in the world. One possible financial product that could eventually be offered using this technology would be what amounts to a savings account denominated in U.S. dollars for people living in Nigeria, and eventually other African nations. Instead of Nigerians losing 12% to inflation at current rates by keeping their cash in a savings account, they could be paid interest denominated in U.S. dollars for funds held in custody elsewhere. “Being able to save in stablecoins and earn interest per annum is huge,” says Bademosi. “And we can offer that up to anyone anywhere.”

Users will also be able to cash in and cash out using local fiat currencies. Longer term plans include a physical debit card and the ability to purchase U.S. stocks, Nigerian mutual funds and agriculture debt, and unspecified incentive programs designed to jumpstart the cryptocurrency economy in Africa, according to internal documents provided to Forbes. The documents compare Bundle to Mosaic, the internet browser invented by Marc Andreessen, and credited for weaving together the previously esoteric processes required to use the internet into a single, intuitive browser. 

In September 2019, Bundle quietly raised $450,000 from Binance, Pave Investments and other African investors. “We believe Bundle can become one of the key projects that will support Binance’s mission of scaling the adoption of crypto on the continent,” says Binance CEO Changpeng Zhao (CZ). To help do that, Bundle will be free at launch, with plans to eventually charge 0.5% to 2% per transaction on all short term trades and 3% of assets under management on yearly gains, for longer-term investing. While the finer details of how that works have yet to be announced, we can look to Binance for some intriguing clues. 

After creating BNB in July 2017, the asset has grown to a total market value of $2.2 billion, making it the eighth largest crypto-asset according to CoinMarketCap.com, the widely used cryptocurrency markets site Binance recently acquired for a reported $400 million. But it’s the way Binance uses that asset, which users acquire in exchange for making transactions on-site, that Bundle perhaps has the most to learn from. 

Binance’s users are allowed to pay their fees on the site using the same BNB cryptocurrency they are rewarded for being regular users, and a new platform, called LaunchPad, lets users raise capital via initial coin offerings (ICOs) also payable in BNB, establishing what cryptocurrency news site CoinDesk called “a virtuous cycle by which its users were incentivized to stay within its platform.” Bademosi, it would seem, has learned his lessons well, a promising sign for the future. “Bundle does an excellent job of putting fiat and crypto side by side,” he says. “And then nudging the user to use some of these digital currencies or assets in innovative ways.”

Michael del Castillo,Forbes Staff, Crypto & Blockchain

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31% Of Small Businesses Have Stopped Operating Amid Coronavirus: Sheryl Sandberg Shares How Facebook’s Latest Product Aims To Help

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The coronavirus pandemic has continued to take a catastrophic toll on America’s small businesses. According to Facebook’s State of Small Business report, 31% of small businesses and 52% of personal businesses have stopped operating as a result of the crisis. 

“What we know today is pretty sobering,” says Facebook COO Sheryl Sandberg. “We’re in a really hard economic situation that is hitting all businesses, but particularly, small businesses really hard. We also know how critical small businesses are for jobs—long before coronavirus,” she says. “Two thirds of new jobs in this country happen because of small businesses and so that means what’s happening with small businesses has always been important, but it’s more important than ever.”

Especially concerning is that only 45% of business owners and managers plan to rehire the same number of workers when their businesses reopen. That number is just 32% for personal businesses. 

“If these businesses are letting people go, it’s not that they don’t want to rehire them,” Sandberg says. “It’s because they don’t think they’re going to be able to. That’s a pretty serious thing for us to be facing.”

Businesses that have been able to maintain operations still face significant hurdles, namely access to capital and customers. Some 28% of businesses surveyed say their biggest challenge over the next few months will be cash flow, while 20% say it will be lack of demand. 

The report, conducted in partnership with the Small Business Roundtable, was based on a survey of 86,000 owners, managers and workers at U.S. companies with fewer than 500 employees. It is also a part of the company’s broader data collection initiative with the World Bank and the Organization for Economic Cooperation and Development on the Future of Business.

“We were already in the process of developing this report before the coronavirus pandemic hit,” Sandberg says. “We expected it to be a pretty rosy tale back then of low unemployment, flourishing entrepreneurship, and jobs growing all over the world. Fast forward to today and we’re in a very different position.”

An example of Facebook’s new Shops feature, which creates digital “storefronts” for businesses.
 
FACEBOOK

Now, the company is launching Facebook Shops, an ecommerce product that allows businesses to set up online “storefronts” on Facebook and Instagram. Businesses can customize their digital shops, using cover images to showcase their brands and catalogs to highlight their products. And just as customers can ask for help when shopping in physical stores, they can message business owners directly via WhatsApp, Messenger or Instagram Direct to ask questions, track deliveries and more. “Our goal is to make shopping seamless and empower anyone from a small business owner to a global brand to use our apps to connect with customers,” wrote Facebook cofounder and CEO Mark Zuckerberg in a post announcing the new product. As was the case with the survey, the rollout was planned prior to the pandemic, but was accelerated as businesses have turned to online tools to adapt in the face of the ongoing crisis. According to the survey, 51% of small business owners have  increased their online interactions with customers, and 36% of operational businesses are now conducting all sales online. 

“One of the things I find so amazing is how much of the activity has migrated online and that we’re doing things we never thought were possible,” says Sandberg. “If I had asked you or you had asked me, could I work entirely from home? Can my whole company go home? I would have said ‘No way.’ But we did it. Small businesses have even more entrepreneurial spirit.”

There are more than 30 million small businesses in the U.S., many of which are struggling to stay afloat amid forced closures and are still hoping to receive financial relief from the government. According to a recent survey by Goldman Sachs, 71% of Paycheck Protection Program applicants are still waiting for loans and 64% don’t have enough cash to survive the next three months. As of April 19, more than 175,000 businesses have shut down—temporarily or permanently—with closure rates rising 200% or more in hard-hit metropolitan cities like Los Angeles, New York, and Chicago, according to Yelp’s Q1 Economic Average report.

Employees of these businesses are disproportionately affected, with 74% and 70% reporting not having access to paid sick leave and paid time off, according to Facebook’s survey. For hotel, cafe and restaurant employees, those figures are over 90%.

Facebook, which relies heavily on small businesses for advertising revenue, was among the first major tech companies to provide much-needed aid. On March 17, the company announced $100 million in grants for small businesses, the majority of which will be distributed in cash, with some ad credits for business services. Of those funds, $40 million will be distributed across 34 American cities, with 50% being reserved for women, minority and veteran-owned businesses. The other $60 million will be distributed to small business owners throughout the world. In addition to financial assistance, the company also rolled out various product offerings including digital gift cardsfundraisers and easier ways for businesses to communicate service changes to their customers. 

Small businesses are resilient, even during times of crisis. According to the report, 57% of businesses are optimistic or extremely optimistic about the future, with only 11% of operating businesses expecting to fail in the next three months, should current conditions persist. 

“The report raises awareness about the struggles small businesses face from the Covid-19 pandemic,” says Rhett Buttle, founder of Public Private Strategies and co-executive director of the Small Business Roundtable. “But small businesses have brought us out of previous economic downturns and they will do so again.”

Maneet Ahuja, Forbes Staff, Entrepreneurs

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Birds Of A Feather: The Stepchickens Cult On TikTok Is The Next Evolution Of The Influencer Business

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Like any self-respecting cult, the Stepchickens follow a strict code of conduct as dictated by their absolute leader, Mother Hen, a comedian named Melissa who posts on TikTok as @chunkysdead. Mother Hen has widely preached a message of peace, telling her 1.7 million TikTok followers: “We do not rule by being cruel, we shine by being kind.” Further, she has asked all Stepchickens to make themselves easily identifiable and make her photo their TikTok profile picture.

Mother Hen has created TikTok’s first “cult.” (Her word.) Boiled down, she is a social media influencer, and the Stepchickens are her fans, just as more famous TikTok influencers—Charli D’Amelio, Addison Rae and the like—all have their fanbases. But Mother Hen’s presence and style is quite singular, particularly in the way she communicates with her followers, what she asks them to do and how the Stepchickens respond to her. After all, not every member of the Charli hive use her image as their profile pictures.

“These influencers are looking for a way to build community and figure out how to monetize their community. That’s the No. 1 most important thing for a creator or an influencer,” says Tiffany Zhong, cofounder of ZebraIQ, a community and trends platform. “It’s become a positive for Gen Z, where you’re proud to be part of this cult—part of this community. They are dying to be part of a community. So it’s easy to get sucked in.”

Mother Hen, who didn’t return a request to comment for this story, already had a popular comedy vlog-style TikTok account on May 6 when she asked her followers to send suggestions for what they could name their cult. From the ideas offered up, she chose Stepchickens, and in the 19 days since, her following has more than doubled. (It was around 700,000 back at the beginning of this month.) She has posted videos about taking ediblesher celebrity lookalikes and her relationship status (“all this cult power, still no boyfriend”). And perhaps in violation of her first-do-no-harm credo, Mother Hen has implored her followers to embark on “battles” and “raids,” where Stepchickens comment bomb other influencers’ videos, posting messages en masse. She has become the mother of millions: TikTok videos with #stepchickens have generated 102 million views on the app, and her own videos have received 54.6 million likes.

Mother Hen is now concentrating on feathering her nest. She has launched a large range of merch: smartphone cases ($24), hoodies ($44), t-shirts ($28) and beanies ($28). Corporate sponsorships seem within reach, too. TikTok accounts for the Houston Rockets, Tampa Bay Rays and one for the Chicago Bulls mascot, Benny, all changed their profile picture to the image distributed by Mother Hen. The Rays sent her a box of swag, addressing the package to “Mother Hen,” of course. She dressed up in the gear (two hats, a fanny pack, a tank top) and recorded herself wearing it in a TikTok, a common move by influencers to express gratitude and signal that they’re open to business sponsorship opportunities. Mother Hen has launched a YouTube channel, too, where she’ll earn ad revenue based on the views that her 43,000 subscribers generate by watching her content.

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Then there is the Stepchickens app available on Apple devices. This digital roost is a thriving message feed—it resembles a Slack channel or a Discord server—where Stepchickens congregate, chat and coordinate their raids. They can also use it to create videos, ones “to glorify mother hen,” the app’s instructions read.

The app launched last Monday and has already attracted more than 100,000 users, a benchmark that most apps do not ever see and the best reach within months of starting. Since its debut, it has ranked as high as the ninth most popular social media app in the world on the download charts and in the Top 75 most downloaded across all types of apps. The Stepchickens have traded 135,000 messages, and the app’s most devoted users are spending as long as 10 hours a day on it, says Sam Mueller, the cofounder and CEO of Blink Labs who built the Stepchickens app.

“There’s this emergence of a more active—a more dedicated—fan base and following. A lot of the influencers on TikTok are kind of dancing around, doing some very broadcast-y type content. Their followers might not mobilize nearly as much as” the Stepchickens, says Mueller. Mother Hen’s flock, by contrast, “feel like they’re part of something, feel like they’re connected. They can have fun and be together for something bigger than what they’re doing right now, which is kind of being at home bored and lonely. There’s untapped value here.”

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Op-Ed: How Nigerians Can Unlock Their Potential In The Digital Age

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By Uzoma Dozie, Chief Sparkler

Nigerians are some of the world’s most creative, energetic, and entrepreneurial people. We are rich with talent, enthusiasm, and passion.

Nigerians are a global force bursting with potential and an enviable track-record of success. But in a more complex and fast-paced world than ever before, many of us struggle to find the time or have the ability to fulfil their potential.

Ultimately, this comes down to the lack of effective solutions in the market to support the lifestyle and finances of Nigerians and our businesses. For too long, we have been underserved by the traditional physical retail environment, which is limited by bricks and mortar infrastructure and legacy technology – the weaknesses of which have been laid bare by the Covid-19 global pandemic.

Unlocking Nigeria’s digital economy

While Nigerians are being underserved by current circumstances, there is also an exciting opportunity to start filling a gap in the market.

Nigeria’s digital economy is thriving, but it remains informal. Nigeria has a population of 198 million people – 172 million have a mobile phone and 112 million have internet access.

Many of us access social media platforms such as Facebook and Instagram through our phones and use them as valuable sales tools, especially female entrepreneurs. Data and digital applications have the potential to revolutionize the daily lives of millions of Nigerians.

Therefore, new digital-only solutions are required. These should not just focus on finances though – they have to be intrinsically linked with everyday lifestyles, rather than thinking about linear processes and transactional outcomes.

Let us take one example. Chatbots powered by artificial intelligence have long been used to provide financial advice. But these chatbots could do so much more and evolve to provide support for more sophisticated usage, such as a personal adviser or lifestyle concierge.

Furthermore, these solutions should not just support Nigerians at home, but the ever-growing diaspora across the world.

Introducing Sparkle

The opportunity to play an integral role in transforming Nigeria’s digital economy and lead the charge in growing the digital economy across Africa inspired the creation of Sparkle.

Sparkle was founded with five core values – freedom, trust, simplicity, inclusivity, and personalization. We are adopting these values and embedding them in everything we do.

We will be leveraging technology and data to create and apply new digital-only solutions which bring more Nigerians into the formal economy thereby benefitting Government, businesses, and individuals.

Starting with the launch of a current account, we will co-create with our customers and collaborate with our partners to improve our services and increase our user base. We embrace collaboration and we are

working with some of the world’s biggest companies, including Google, Microsoft, Visa, and PwC Nigeria, to achieve our vision.

In addition, we want to create a more inclusive economy and break down barriers by accelerating the role and influence of female entrepreneurs, many of whom already operate in the informal economy with the help of Instagram and other social media apps.

At present, we are facing a global crisis in the shape of the COVID-19 pandemic. COVID-19 has shown us that we need a strong digital infrastructure to ensure the economy continues to function. It will likely completely change the way we operate and conduct business in the future.

COVID-19 has only reinforced our belief that new digital solutions like Sparkle are required now more than ever before to serve Nigerians, boost the formal economy, and unlock potential in the digital age.

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