Meet the Kenyan Startup Trying to Change Bill Gates' Mind on Bitcoin

Last month, the Bill and Melinda Gates Foundation awarded bitcoin startup Bitsoko $100,000 to help troubleshoot Africa's mobile money systems.

AccessTimeIconJul 23, 2015 at 9:45 p.m. UTC
Updated Sep 11, 2021 at 11:47 a.m. UTC
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Last month, the Bill and Melinda Gates Foundation awarded bitcoin startup Bitsoko $100,000 to help troubleshoot Africa's now-ubiquitous mobile money systems.

The news, which followed a long application process beginning last September, came as a surprise to the team of six, not least because Bill Gates has been publicly skeptical about the future of the payment technology in the developing world.

"They [the foundation] had not worked with any other bitcoin startups to our knowledge, so we were really not too sure if they would want to come on and us be their first," Daniel Bloch, Bitsoko's head of business development, told CoinDesk.

Through its Grand Challenges Explorations grant, now in its eighth year, the Gates Foundation has funded thousands of outside-the-box ideas seeking to tackle 'unsolved problems' in global health.

This year, for the first time, it's branching out into nine initiatives around mobile money – a technology that, in little under a decade, has already seen rapid adoption among the world's underbanked. While the $100,000 isn't a seal of approval per se, it does indicate the foundation is willing to give bitcoin a try, Bloch said.

"I know that the Gates Foundation has had some events and internal debates around bitcoin, so I think because of that timing they've said 'Lets give them a grant for 18 months and see, does it work? Is it increasing the ability for merchants to accept mobile money payments, or is Bill right?'"

With the money, Bitsoko is running a year-long research study on whether its three-pronged service – a consumer wallet, a merchant processor and an API – can spur mobile money adoption in the east and west of the continent.

Currently in beta with a select number of users, it will launch officially on 25th September this year.

PayPal for mobile money

Despite the mobile money boom, and the success of projects such as Kenya's MPesa, there is one problem that persists: interoperability.

In 2013, 52 of the world's countries had more than one mobile money source – a term used to describe each telecom's 'brand' of cash. In Ghana, for example, where Bitsoko is running half of its trial, there are five main telecoms.

This variety of payment methods creates friction on both sides of the till. Due to the fees and set up costs involved, Bloch said, local merchants will typically accept only one type of mobile cash. However, consumers will still need to convert their funds from, say, AirTel to MTN, to accommodate for this when they shop, and face high fees when doing so.

Enter Bitsoko, a way to accept many currencies and cash out in just one, which Bloch described as a kind of PayPal for mobile money.

Users top-up their online wallet, they pay in the money of their choice, and – via the blockchain – the merchant receives payment in the form of currency they prefer, allowing them to leapfrog the hassle and fees involved in changing between currencies.

"As mobile money grows, we see Bitsoko as a solution that can really help merchants lower their costs to either be equivalent or lower than existing systems and not have additional fees by having to accept more than one and go back and forth."

While there are plans to support non-smartphone models in the future – Bitsoko is "exploring opportunities" with SMS wallets, Bloch said – currently the target market is the young, vibrant tech community in Nairobi, aka the Silicon Savannah.

For this reason, and for the purposes of the grant, Bitsoko will be focusing solely on bitcoin top-ups for now, though it will allow users to top-up via cash, bank transfer or mobile money in the future.

 The Bitsoko mobile app
The Bitsoko mobile app

Phase two

But what does any of this have to do with health? Well, if the project can produce hard evidence that it has been successful in its mission to save merchants time and money with bitcoin, the team's plan for phase two of the grant (which can be up to $1m) will be an expansion into industry-specific payment processing for institutions such as hospitals and pharmaceutical companies.

The hard evidence it needs comes in the form of customer acquisition, retention and cost savings for the 40 merchants – 20 in Kenya's capital, Nairobi, and the other 20 in Accra, Ghana – taking part in the trial. All data will be tracked via Bitsoko's merchant analytics and customer loyalty platforms.

"We want to offer merchants data on their store they didn't know," Bloch said. Bitsoko is hoping that, by using this information, companies will be able to adapt their stores to suit the needs of their customers and their business, for example optimising a menu or providing better loyalty cards.

Currently, this comes for free. However, the company is weighing the merits of a monthly payment model, versus a 0.1% transaction fee once the trial is over. If merchants choose to stick with the platform, and pay, this could improve Bitsoko's chances of receiving more funds from the foundation.

About Bitsoko

Bloch first met Bitsoko's two other founders, brothers Allan and Gibson Juma, through the Crypto College Network (CCN) which he started in January 2014 as a way to meet other students into bitcoin.

The Jumas, though not students, were working out of Kenyatta University’s incubator at the time. After discovering CCN online, they got in touch with Bloch, who helped them plan Nairobi's first bitcoin meetup last September. Bloch decided to join Bitsoko full time after his graduation.


The team has since expanded, bringing on Africa's only bitcoin core developer, Tawanda Kembo; Emmanuel Noah, who heads up business development in Ghana and Jessica Colaco, Bitsoko's head of research.

Bitsoko's home in the tech hub of Nairobi means the team have witnessed the scene's "amazing energy" and daily events for investors, NGOs and international corporations.

For this reason, Bloch is confident the region will see more companies like Bitsoko and remittance platform BitPesa, which raised £1.1m from US-centric investors back in February, springing up.

However, there is still some way to go: "The main part holding back investors ... I think the scene will increase as education and collaboration increases."

Bitsoko hopes to play a part in this, starting with a series of educational events. Its first workshop this month, which took place in the city’s iHub centre, saw over 60 developers attend. This, Bloch said, speaks to the level of interest from those looking for a way in to the industry.

Additionally, the startup has also been pleasantly surprised about the enthusiasm for the currency itself. "We've noticed that a lot of people want bitcoin currently, and in Kenya and in Ghana there is a population that does want bitcoin and who is going to, we think, enjoy the volatility aspect," Bloch said.

This speaks to the fact the population has had to adjust to radical changes in payments since the rise of systems like MPesa, but not just this:

"You have others like those we work with in Zimbabwe who in their lifetime have seen their currency collapse to valueless and so ... people see the fragility of fiat money and the need to innovate and have stronger systems."

Featured image: JStone /


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