Ever since blockchain was launched in the past decade, its adoption in several first class economies across the globe has garnered momentum and sparked tremendous growth in those economies especially among the young population. In Kenya, however, its growth in the last decade has been stunted and slow in catching up but recently, the younger citizens have witnessed the potential of this sector from other economies and are gradually raising awareness and actively looking for information to better understand it. One of the sectors that is about to get an uplift from this information is the manner in which we conduct crowdfunding and donations which involve traditional means popular among the aging population. Crowdfunding involves the collection of small amounts of money from large groups of people who share a common objective. The sourced funds can then collectively be used to undertake a large business venture or personal use. Crowdfunding using traditional means has its own challenges which deny the process an opportunity to be efficient and effective across multiple groups of people.
Drofund is a crypto-based financial startup that has been launched in the Kenyan market to help African entrepreneurs achieve their objectives by receiving donations from investors. The platform allows entrepreneurs to post their startups and projects with details so as to woo potential investors to crowdfund their operations by giving donations. The platform allows donors to make donations in Bitcoin across startups from many sectors including healthcare, agriculture, construction, logistics and manufacturing among others. The startup on the other hand only charges 5% as fees for offering the crowdfunding service to entrepreneurs. The startup was launched in 2018 and is based in Nairobi, Kenya, but offers services to other African countries.
Though the startup has not managed to launch any fundraising rounds yet, it has attracted several competitors in the sector. The competitors include M-changa, MKfundme, Changisha and Changia Boresha. It is currently ranked among the top 10 in Kenya. Drofund has segmented its market into 2, that is B2C(Business to Consumer) and B2B(Business to Business). The startup however needs to leverage the power of blockchain in crowdfunding effectively so as to help businesses achieve their development goals. This sector is relatively new to the Kenyan market but with a bit of effort in popularizing and raising awareness of this sector, a lot could be achieved.
Author’s sentiments
The introduction of blockchain technology in crowdfunding could solve a lot of issues in the traditional mechanisms. The Kenyan market heavily relies on ‘Chamas’, small groupings of people with similar interests, to raise funds. The Chamas sometimes exercise a merry go round kind of algorithm in their operations. Sometimes, using this outdated system, the chamas break up because of so many reasons ranging from lack of trust to disputes arising among the members or allegations of embezzling funds. With smart contacts, crowdfunding can be made seamless since blockchain creates ledgers that are immutable, transparent and secure. Additionally, people do not have to know each other to fundraise towards a common goal because of trust in blockchain. Chamas on the contrary, involve people who know each other like friends, family, workmates and business associates. This limits the amount of funds the groups can raise therefore limiting there investment options. My final take is that, Africans need to embrace technology to revolutionize their economies. This needs to happen at all levels including the governments so as to achieve effectiveness.
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