Bamba, an African-focused fintech, has closed a $3.2 million in seed funding to scale its app and build out its team.
The round was led by 468 Capital with participation from Presight Ventures, Jigsaw VC, and angels investors including Mato Peric, Leonard Stiegeler, Laurin Hainy and Thomas Stafford.
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.
Micro, small and medium-sized enterprises account for 90 per cent of all businesses in Sub-Saharan Africa and contribute more than half of all jobs.
However, the unavailability of digital solutions for both recording keeping and payments creates a hurdle that prevents the opportunity for these businesses to scale due to inadequate access to credit facilities.
Bamba is one of the innovators solving this problem. The mobile-first application enterprise software is an android application allowing micro-merchants across Africa to run their entire business utilising their phones.
It provides a mobile application allowing small businesses to easily manage their customers and stock levels, gets paid, payout, and takeout cash advances against their future cash flow.
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 digitalise business payment and record-keeping processes further. This digitalisation 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. 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.
Commenting on the raise, Bastian Gotter, Founder & CEO, Bamba said, “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.”
Ludwig Ensthaler, Partner at 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.”
Fabian Hansen, Investor, Presight Ventures added: “We appreciate entrepreneurs that build novel solutions that push boundaries and are thrilled to support Bamba’s potential impact across the small businesses ecosystem in Africa.”
Dan Jones, Partner, Jigsaw VC commented, “Bamba sits at the intersection between cash and mobile money, between payments and credit. We believe there is a significant opportunity in this space and are keen to explore it with Bastian.”