Introduction

In my last article, we covered an explanation of blockchain crowdfunding as a concept, expanding further into why African startups need the multifaceted solution that crowdfunding on blockchain offers. This piece delivers well on my promise to share more insights into the options available for African entrepreneurs regarding blockchain crowdfunding.

For new readers, blockchain crowdfunding is simply a method deployed by projects and startups to raise capital through blockchain technology. Over the space of decades, the blockchain space has seen successful crowdfunding campaigns launched with the projects themselves still functional even today.

Some case studies of such projects are:

Ethereum (ETH)

Raised $18 million in ICO-type crowdfunding in 2014. Ethereum is the #1 platform for launching tokens and building Apps.

Basic Attention Token (BAT)

Raised $35 million in ICO-type crowdfunding in 2017. Basic Attention Token is a rewarding medium on Brave, a Web 3 browser built to transform digital advertising.

Filecoin (FIL)

Raised $205 million in ICO-type crowdfunding in 2017. Filecoin is a decentralized storage solution that rewards users in FIL tokens for lending their storage space.

Other case studies flood the landscape of blockchain crowdfunding. Each of these case studies adopted the most suitable of the four types of crowdfunding in blockchain to launch successfully.

4 Models of Blockchain Crowdfunding

Initial Dex Offering (IDO)

This type of crowdfunding helps startups and projects launch tokens through a decentralized liquidity exchange. It's fast, permissionless, and has recorded an impressive streak of success despite being the most recently developed of all four types of blockchain crowdfunding.

Initial Exchange Offering (IEO)

IEO is the most recommended model for startups. Here, a startup or project is critiqued and approved by a separate technical team, making them safer compared to conventional methods of crowdfunding. With this model, each enterprise is required to create their native token and it's recorded to have given the highest ROI out of all four models.

Security Token Offering (STO)

Security Token Offering facilitates the sale of security tokens which are backed by assets. Tokens are sold to investors interested in funding startups and every single gem contains ownership data, making STO the perfect representation of blockchain technology.

Initial Coin Offering (ICO)

Initial Coin Offering is the most popular of all four models. This is because it allows users to show support for a startup or project by purchasing crypto tokens. The catch here is that in the event of failure to meet the target amount, investors simply get their money back.

Now to the highlight of this piece.

Blockchain Crowdfunding and Africa's Position

The possibilities for African startups with blockchain crowdfunding are limitless.

Thanks to the decentralized nature of blockchain founders have been helped to bypass the restrictions of traditional fundraising options while allowing contributors to monitor and evaluate how their contributions have been managed.

The result of blockchain-based crowdfunding are benefits like financial inclusion, capital accessibility, and reduced entry barriers.

But are startups in the African region maximizing this solution?

The answer is evident in the impressive track record so far. This segment will cover three leading facilitators of capital funding through blockchain resources and also with blockchain acceleration in view.

EMURGO Africa

Emurgo Africa, a branch of the Emurgo ecosystem, focuses on promoting blockchain use and investing in African startups.

It has supported many new businesses by providing crucial funding through blockchain initiatives, helping them grow.

The goal is to speed up the adoption of blockchain technology in areas like agriculture, healthcare, and finance, driving innovation and growth across Africa.

MAZZUMA

Mazzuma is a mobile payment platform that uses blockchain technology to make transactions safe and efficient. It successfully raised funds through an Initial Coin Offering (ICO) to expand its services across Africa. The platform aims to improve mobile payments, especially in areas where traditional banking is not well-established.

MARA

Mara is a cryptocurrency platform designed for use across Africa, providing the necessary financial tools for blockchain and crypto activities.

In 2022, Mara successfully raised $23 million through a mix of venture capital and crowdfunding via blockchain. This money will help develop various financial products for African users, including a crypto exchange and a digital wallet.

Conclusion

In the face of difficult factors, Africa's start-up industry continues to advance at a healthy pace. Her extensive success over the years reflects the region's deeply rooted resilience and passion for innovation.

Blockchain crowdfunding provides African startups with a way to raise capital, bypassing traditional barriers and ensuring transparency.

This method fosters financial inclusion and easier access to funds. Successful examples include Emurgo Africa, Mazzuma, and Mara, which have secured funding to innovate and grow. Emurgo Africa promotes blockchain use across various sectors,