• Sun. Nov 27th, 2022

Jambo raises $7.5M from Coinbase, Alameda Research to build “web3 super app” of Africa

ByASNF

Feb 21, 2022

Jambo, a Congo-based startup building Africa’s web3 user acquisition portal through “learn, play, earn” and democratizing access to crypto-based income-generation opportunities, has raised $7.5 million in seed funding.

Experts say Africa is poised to be disrupted by web3 in a similar fashion that has seen Southeast Asia become one of the best markets for web3. The latter is home to startups like Axie Infinity and Yield Guild Games, which have raised millions of dollars in venture capital owing to the adoption of crypto and play-to-earn models.

The mix of positives such as a fast-growing population–the youngest globally–, solid smartphone penetration, increasing crypto adoption, and negatives like low GDP per capita across board and unemployment makes Africa the next ripe ground for web3.

And a few companies, such as Jambo, are positioning themselves for this next boom. According to James Zhang, its co-founder and CEO, Jambo wants to onboard millions of users to web3 in Africa through its applications. He founded the company with his sibling Alice Zhang — both Congo-born Chinese — in December 2021 after noticing the opportunity to duplicate the success of web3 projects in Southeast Asia across Africa.

Although users of Axie Infinity and other guilds only earn an income while playing games under a revenue-sharing model, Jambo is taking a two-sided approach by allowing its users to do so when they partake in web2 and web3 activities.

For instance, users can save their data spend when they use Jambo. Zhang explains that Jambo partners with telecom providers to get an almost 70% discount and sell directly to its users at a 50% discount from the original cost. “It’s one of our main user acquisition strategies where we want to double every Africans airtime and data,” Zhang said.

Secondly, Jambo is partnering with social media companies so users can earn tokens (which they can convert to income) while watching their content on its app.

“The reason we can do that is via partnerships with these companies as we tokenize a part of their advertising budget and directly provide to the end-user,” he said. “Many web2 incumbents or even web3 are having a $100-200 user acquisition costs so we can lower that by order of magnitude by directly incentivizing the end-user.”

The last bit is play-to-earn games. There are currently no popularized play-to-earn web3 games from Africa and this is because the infrastructure to create them, which is through Guilds, is lacking. Zhang said Jambo wants to build that infrastructure. Still, unlike well-known guilds whose business models involve taking percentages of profit from its users, his company doesn’t plan to take a cut from its users’ earnings. Instead, Jambo’s revenues would come from web2 models — charging advertising dollars and commissions from selling airtime and data.

James Zhang (co-founder and CEO, Jambo)

As the “web3 onboarding portal of Africa,” the CEO said Jambo is testing out over 10 play-to-earn games to introduce to its users in the next couple of months. But for a region with little or no understanding of web3 workings, how does Jambo expect its project to take off smoothly?

“Education is at the core of what we do because I think there is no shortcut in Africa. You have to educate the user base before you can even think about monetizing or start to acquire users at the end of the day. This is why we are launching classes with a full curriculum on web3. We plan to launch that in more than five universities in Africa by the end of Q1,” he answered.

Since the start of this year, Jambo has already signed up over 12,000 students across 15 countries (Morocco, Nigeria, Ethiopia, Equatorial Guinea, Uganda, Kenya, Congo, Uganda, Rwanda, DR Congo, Tanzania, Zambia, Namibia, Madagascar and South Africa) to take a curated web3 curriculum, both online and offline. The company said this would enable students to explore opportunities in play-to-earn gaming and decentralized finance (DeFi). The 10-week programs are available at colleges and across 600+ physical partner locations where hundreds of ambassadors sign up students.

With nearly 60% of the population under 24 years of age and almost 50% of university graduates in Africa unemployed, Jambo believes its model of educating users about play-to-earn games and DeFi could “lead to financial prosperity in ways Africans could never have accessed before.”

Educating Africa’s young population about web3 and decentralization seems to be a correlating theme with recent web3 upstarts in Africa. Nigeria-based Nestcoin, for instance, raised $6.4 million to scale its web3 initiatives, which include Breach, a media outlet that creates bite-sized and informative crypto content for its users.

Both companies have different play-to-earn models — Nestcoin runs a gaming guild called Metaverse Magna (MVM), Jambo doesn’t. Yet, they are similar in setting up a new web3 segment in Africa different from more established platforms such as remittance and crypto exchanges.

For Zhang, the fundamental distinction is that while customary platforms help Africans save and send money, new upstarts are increasing earning and wealth potentials for users.

“I think in Africa, there is no money to save because there’s 1% super-rich and 99% the same. So for us, we set out with a different methodology, which is to help the everyday person make money,” the chief executive said.

“This is why every component in our super app is actually to help the everyday person make money from play to earn, to making money from watching videos and saving money on data credits. So ideally, in three to six months, once our app comes online, the everyday person can make $50 a month from playing on Axie Infinity, make another $20 a month from watching videos, and they make another $10 bucks a month from the money they save on data credits. That would be the ideal situation our app can accomplish with every person.”

Jambo expects to release its beta version by Q2 and go live in Q3. And in a bid to build its super app, the 60-man team spread across sub-Saharan Africa, Santa Clara and Shenzhen raised a party round from investors who have backed prominent web3 companies such as Avalanche, Dharma, BlockFi and Polygon.

They include Coinbase Ventures, Three Arrows Capital (3AC), Alameda Research, Tiger Global, Delphi Ventures, AllianceDAO, DeFiance Capital, Yield Guild Games and Polygon Studios. And a couple of angel investors from the web3 ecosystem like Polygon co-founder and CEO Sandeep Nailwal; ex-ParaFi partner Santiago R Santos; Terraform Labs co-founder and CEO Do Kwon; and partner at Delphi Digital Piers Kicks.

“What WeChat did in China, Jambo will do in Africa. Excited to back this A+ team in becoming the Web3 super app of the continent,” said Santiago R Santos, a web3 investor and ex-ParaFi partner, in a statement.

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