Jambo, a Congo-based startup building Africa’s web3 user acquisition portal through “learning, playing, earning” and democratizing access to crypto-based revenue-generating opportunities, has raised $7.5 million in seed funding.
Experts say Africa is on the brink of being disrupted by web3 in a similar way that has made Southeast Asia one of the best markets for web3. The latter is home to startups such as Axie Infinity and Yield Guild Games, which have raised millions of dollars in venture capital thanks to the adoption of crypto and play-to-earn models.
The mix of positives such as a rapidly growing population – the youngest in the world – solid smartphone penetration, increasing crypto adoption and negatives such as low GDP per capita across the board and unemployment – makes Africa the next ripe ground for web3.
And a few companies, like Jambo, are positioning themselves for this next boom. According to James Zhang, co-founder and CEO, Jambo aims to bring millions of users to web3 in Africa through its applications. He founded the company with his brother Alice Zhang – both Congo-born Chinese – in December 2021 after seeing the opportunity to replicate the success of web3 projects in Southeast Asia across Africa.
While users of Axie Infinity and other guilds only earn income while playing games under a revenue-sharing model, Jambo takes a two-sided approach by allowing its users to do so when participating in web2 and web3 activities.
For example, users can save their data expenses when using Jambo. Zhang explains that Jambo partners with telecom providers to get nearly 70% off and sell directly to its users with 50% off the original cost. “It’s one of our key user acquisition strategies where we want to double every African’s airtime and data,” Zhang said.
Second, Jambo partners with social media companies so that users can earn tokens (which they can convert into revenue) while viewing their content on the app.
“The reason we can do that is through partnerships with these companies, because we tokenize a portion of their advertising budget and distribute it directly to the end user,” he said. “Many incumbent web2 operators or even web3 have $100-200 user acquisition costs, so we can reduce that on an order of magnitude by incentivising the end user directly.”
The last part are 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, through Guilds, is lacking. Zhang said Jambo wants to build that infrastructure. Yet, unlike well-known guilds whose business model is to take profit percentages from the users, his company has no intention of cutting back on the users’ revenues. Instead, Jambo’s revenue would come from web2 models – charging advertising dollars and commissions for the sale of airtime and data.
As the “web3 entry-level portal of Africa”, the CEO said Jambo is testing more than 10 play-to-earn games to introduce to its users in the coming months. But how does Jambo expect his project to get off to a smooth start in a region with little or no understanding of how web3 works?
“Education is at the heart of what we do because I think there are no shortcuts in Africa. You need to educate the user base before you can even think about monetizing or recruiting users at the end of the day. That’s why we’re launching full curriculum classes on web3. We plan to launch that in more than five universities in Africa by the end of the first quarter,” he replied.
Since the beginning of this year, Jambo has already enrolled more than 12,000 students in 15 countries (Morocco, Nigeria, Ethiopia, Equatorial Guinea, Uganda, Kenya, Congo, Uganda, Rwanda, DR Congo, Tanzania, Zambia, Namibia, Madagascar and South Africa) to follow a curated web3 curriculum both online and offline. The company said this would allow students to explore opportunities in gaming to earn and decentralized finance (DeFi). The 10-week programs are available at colleges and over 600 physical partner locations where hundreds of ambassadors sign up students.
with almost 60% of the population under 24 years and almost 50% of university graduates in Africa are unemployedJambo believes that the model of educating users about play-to-earn games and DeFi “could lead to financial prosperity in ways Africans could never have used before”.
Educating the young African population about web3 and decentralization seems to be a correlating theme with recent web3 upstarts in Africa. For example, Nigeria-based Nestcoin has raised $6.4 million to scale up its web3 initiatives, including Breach, a media outlet that creates bite-sized and informative crypto content for its users.
Both companies have different play-to-earn models – Nestcoin has a gaming guild called Metaverse Magna (MVM), Jambo does not. Yet they are similar in establishing a new web3 segment in Africa that differs from more established platforms such as remittances and crypto exchanges.
For Zhang, the fundamental distinction is that while common platforms help Africans save and send money, new upstarts increase the profit and wealth potential for users.
“I think in Africa there is no money to save because there is 1% super rich and 99% the same. So for us, we started with a different method, which is to help the common person make money,” the CEO said.
“This is why every single part in our super app is actually meant to help the common person make money playing to earn, to earn money watching videos and save money on data credits. So ideally, if our app comes online in three to six months, the common person can earn $50 a month playing on Axie Infinity, earn another $20 a month watching videos, and they earn another $10 dollars a month from the money they save on data credits, that would be the ideal situation our app can achieve with everyone.”
Jambo expects to release its beta in the second quarter and go live in the third quarter. And in an effort to build its super-app, the 60-strong team spread across sub-Saharan Africa, Santa Clara and Shenzhen has gathered a round of celebrations 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 few 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. I am delighted to support this A+ team to become the continent’s Web3 super app,” Santiago R Santos, a web3 investor and ex-ParaFi partner, said in a statement.