Friday, August 12 2022

Hi Quartz Africa members,

The smartphone revolution and cheap mobile internet have led to an increase in the number of mobile gamers in Africa. Users of various gaming platforms like Kucheza, Gamesole, Chopup, and Kuluya do it for fun, but many have fallen into addiction.

According to a 2021 report, there are now 186 million Africans playing games online. The main countries are South Africa, Ghana, Nigeria, Kenya and Ethiopia. One of the reasons for the immense popularity of the game is the high unemployment rate in many countries. For unemployed gamblers who lose money by betting, addiction is doubly ruinous.

In Nairobi, game company Usiku Games wants to help. To reap certain social benefits from the game and attract more Africans into national health insurance programs, Usiku strategically integrates health insurance savings into the very structure of the game. In a pilot program, players can save their winnings as digital tokens on a blockchain system and then “spend” them to pay for health insurance.

Checklist:

💡 The Opportunity: Almost 97% of Africans were uninsured 2018. The player population is mostly made up of young people. 60% of the African population is elderly under 25. The average age of the continent is 19 years old. Through blockchain gaming, Usiku Games wants to ensure the insurance of young Africans.

🤔 The challenge: Usiku plans to forge a public-private partnership with the government that will allow national insurance funds to accept token monthly premium payments, a challenge in most African countries.

🌍 The roadmap : Popularizing the concept of “playing to save” with young people and encouraging them to pay their health insurance premiums can ease the stress of paying for future medical treatment.

💰 Stakeholders : Governments should strive to reduce Internet access costs, which are still relatively high compared to the rest of the world. Hospitals and national insurance funds can work alongside gaming startups to bring young gamers into these token insurance schemes.

By the numbers

186 million: Number of players in sub-Saharan Africa

$590 million: The value, in US dollars, of the gambling industry in Africa in 2022

80%: Proportion of global gamers with crypto accounts who want to use digital currency for game purchases

24 million: The number of players in South Africa, the largest gambling market in Africa. The next four countries are Ghana, Nigeria, Kenya and Ethiopia.

302 million: Number of smartphones in Africa in 2018

$6.44: Average price for 1 GB of mobile data in Africa

$127 million: Volume of capital African blockchain startups raised in 2021

60%: Percentage of African population under 25

The case study

Name: Usiku Games

Headquarters: Nairobi, Kenya

Founder: Jay Shapiro

Founded in October 2018, Usiku Games’ mission is to bring about positive behavioral change among African youth. Usiku Games is now the largest gaming platform in Kenya and has expanded to nine other African countries. The company started in Kibera, a slum in Nairobi, and worked alongside NGOs to tackle societal challenges, such as drug addiction and crime, through gaming. The games were designed to appeal to local users: the commands, for example, are in the Swahili and Sheng languages, and the audio tracks are African music. Usiku has a portfolio of 30 games and thousands of players log in to play everyday. All games are free to play, Usiku earns its money from player subscriptions on some of its games.

In January 2022, Jay Shapiro, the founder of Usiku Games, started thinking about how to help his users save money through the platform. Usiku didn’t want the model to look like sports betting, where the winners withdraw the money they win. Instead, Usiku has developed a way for players to use their winnings to pay for health insurance through the National Health Insurance Fund (NHIF), where the minimum premium for unemployed citizens is $5. The company has created tokenized Usiku coins, so that they can be exchanged for NHIF bounties. Each coin is worth 1 Kenyan shilling ($0.01), and these coins are in unlimited supply. By doing this, the startup believes it will help influence behavior change to help young people quit sports gambling.

In conversation with

Jay Shapiro, the founder of Usiku Games, is a blockchain entrepreneur from Canada. He spent 13 years in Singapore and three years in New York, leading innovation projects. In 2017, Jay came to Kenya due to the country’s tech-savvy population and established Usiku Games.

💡 When starting Usiku games:

“I researched the Kibera community and learned that many young people love games. You will find them in video game stores or on their smartphones playing online games. You will also see them flocking to various betting platforms, and most of them got addicted, so I decided to invest in something they like but also help them pay their insurance premiums and keep them away from sports betting , where one is never guaranteed to win.

💻 Why he chose the blockchain game:

“Most of them don’t know it’s blockchain games when they play. I introduced blockchain gaming to make it easier for them to be rewarded for the time they spend playing The rewards come in the form of digital coins, and I’m working with the NHIF to have them accepted by the government as a means of paying the rewards.”

🤝 Make the game useful to everyone:

“The goal is to bring this game to the wider African population. About 65% of those who play the games every day are women. We have games tailored to different demographics. We offer it for free and we We will also present it in French to capture the French-speaking community in West Africa.

Game/blockchain deals at 👀

In January 2022, South African mobile games startup Carry1st raised $20 million Series A extension round from investors such as Andreessen Horowitz, Avenir and Google to help it expand across Africa.

Startups under the African Startup League will receive $1 million of Humanity Node Protocol (HNP), Web3Africa and Adanian Labs to create innovative technologies and companies around blockchain technologies.

Congo Brazaville-based startup Jambo, which is building a Web3 user acquisition platform, closed a $30m Series A funding round led by Paradigm, marking the native crypto investment giant’s first investment in Africa.

More from Quartz Africa

🎮 Why Africa will be the fastest growing video game market in the world

💰 Million dollar blockchain projects have finally arrived in Africa

🗺️ A handful of pro-gamers put Kenya on the global esports map

🇰🇪 How Kenya is pushing for esports dominance

🎵 This Member Brief was prepared by listening to “Cinderella” by Alikiba (Tanzania).

Have a very motivated weekend,

—Faustine Ngila, Quartz East Africa correspondent

A 👀 thing

While funding for fintech and gaming startups has increased over the past decade, funding for blockchain-based startups only started last year and is growing rapidly across the continent. A recent report by Swiss venture capital firm CV VC in partnership with Standard Bank shows that millions of dollars began to flow into the mainland (pdf) in the form of blockchain funding. According to the study, 41 African blockchain startups across eight countries raised $127 million in 2021.

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