Pan African fintech app, Bamba has raised $3.2 million in a seed funding round led by Venture capital firm 468 Capital. Other investors who participated in the funding round include Presight Ventures, Jigsaw VC, and angels Mato Peric, Leonard Stiegeler, Laurin Hainy, and Thomas Stafford.
Founded in 2022 by serial entrepreneur Bastian Gotter, Bamba is a mobile application focusing on simple tools for merchants to manage their customers, record stocks, receive payments, and access cash advances against their future cash flow.
Bastian Gotter is not new to the African terrain. He has been active as an entrepreneur and an investor. He co-founded iROKOtv with Jason Njoku way back in 2010 and also partnered with him in 2013 to launch SPARK, a $1 million venture that will invest in Nigeria’s most talented tech entrepreneurs Nigerian startups. He left IROKO in 2017 to pursue other interests. He has since been behind the scene but active as an investor.
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Bastian Gotter, CEO of Bamba, said the fund will the company to scale its business to new markets.
“We truly believe entrepreneurship is essential to prosperity, so we make running a small business easier by building mobile-first small business software for Africa. This investment allows us to scale the platform and the team and gives us access to insights from our high calibre of investment partners,” he said.
Micro, small and medium-sized enterprises account for 90 percent of all businesses in sub-Saharan Africa and contribute more than half of all jobs.
In 2021, registered and unregistered merchants accepted over $250 billion in mobile money payments, recording rapid growth. The mixture of receiving/paying out cash or mobile money creates new complexities for merchants; however, it also creates opportunities to further digitalize business payment and record-keeping processes.
Speaking on the investment, Ludwig Ensthaler, Partner, 468 Capital said: “We are thrilled to invest and support the team and vision at Bamba. We feel that the investment opportunities in “enterprise” software focused on small businesses in Africa are significant and remain largely untapped. We believe that Bamba is well placed with a great product and a solid founder to build a category-defining company.”
This digitalization process has the potential to vastly improve access to credit, one of the most significant hurdles preventing the growth of small businesses in Africa. The IFC estimates Sub-Saharan Africa’s small business credit gap at $331 billion, and Bamba’s mobile application sits at the heart of the digitisation process, improving both the payments experience and the access to credit for micro-merchants.
Bamba’s CEO noted that the company is currently in stealth mode and will use the new capital to build out its mobile product offer, scale its engineering team and expand its user base across 12 sub-Saharan African countries with high mobile money penetration.
As 2022 moves closer to its first half, Africa has continued to see an increase in tech investment, erasing the groundbreaking investment records of 2021. Tech funding in Africa grew faster than any other region globally in 2021, reaching a total of $5.2 billion, according to private equity firm Partech.
The African Private Equity and Venture Capital Association (AVCA), which promotes private investment on the continent, wrote in a report that “African startups raised more in 2021 alone than the preceding seven years combined.”
The growth has been attributed to the success of companies like Nigeria’s Paystack, acquired in 2020 by U.S. payments firm Stripe for $200 million, and fellow fintech Flutterwave, valued at over $3 billion, which has fuelled international interest in African startups.
The data compiled by AVCA showed the financial sector accounted for 60% of the investments by value and nearly a third of deals by volume. There is no sign of letting up in 2022 as investors embrace tech businesses in Africa due to their huge potential, particularly fintech.
With the huge number of unbanked in Africa, and growing mobile internet penetration and a population expected to reach 1.5 billion people by 2025, Africa’s fintech market is expected to double its current volume of investment in the next two years.