IROKO co-founder Bastian Gotter raises $3.2 million seed for start-up, Bamba – TechCrunch

In 2010, Bastian Gotter invested up to $200,000 in IROKOtv, an African video-on-demand company that Jason Njoku, his friend and co-founder, launched in Lagos, Nigeria.

Over the next two years, Gotter, as CFO, was instrumental in making IROKO (after raising over $30 million from venture capital, including Tiger Global) a household name in Nigeria’s tech and entertainment scenes.

Gotter left the media company in 2017, a departure that gave him the opportunity to pursue angel investing full-time and pursue new projects. Gotter has written checks on Paystack, Flutterwave and betPawa and co-runs Spark, an investment vehicle he launched with Njoku.

In 2018, he started a preschool chain based in the UK and South Africa. Two years later, he became part of the founding team of Kenya-based fintech PawaPay, whose API connects the mobile money systems of up to 25 telecom operators and enables merchants in 10 countries to receive and send payments between accounts. of mobile money.

Gotter is an investor and a member of the PawaPay board of directors, roles that can be active or passive depending on who is involved. For Gotter, it was more of the latter, so this January he began exploring other opportunities in the mobile money payments space, specifically as it relates to small businesses. This led him to start Bamba, a mobile-based business software for African micro-merchants, which has raised $3.2 million.

After spending time in Kenya (where he was now used to paying with mobile money and rarely cash), he realized that businesses relied heavily on manual bookkeeping and had no software to record their cash transactions and mobile money.

“They also registered stock components and had some kind of customer relationship management on WhatsApp. It wasn’t a cohesive image and it was just one big mess,” he said in a call to TechCrunch. “And that’s where we finally saw the opportunity to launch Bamba.”

Micro, small and medium enterprises represent 90% of all businesses in sub-Saharan Africa. And there are new upstarts providing digital accounting services for a small number of them in West Africa, such as Sabi Cash, Bumpa, Kippa and OZÉ. Bamba is a matching solution for Kenya and surrounding East African markets, where these merchants accepted more than $200 billion in mobile money payments last year.

The platform comprises business management software and an Android app that provides tools for micro-merchants to manage their businesses. Its features include managing customers, recording stock levels, and receiving and making payments.

“Merchants can record which cash and mobile money transactions they charge and their cash and mobile money payments. And through that initial record keeping, we have an entry point into the business,” said Gotter, who also mentioned that Bamba wants to improve cash collection for merchants which is done primarily through USSD payment invoice numbers. and M-Pesa at the point of sale.

“We have the inventory management components that relate to how many and what goods are sold. Payments then resulted in point-of-sale type devices like Square or Yoco that allow you to get a clearer picture of your business and its activities.”

The lack of credit is a thorn in the flesh of the world’s traders; this is most true in sub-Saharan Africa, where the credit gap for small businesses exceeds $300 billion. This is a prominent area where the digitization of accounting proves its utmost importance for merchants. ydDespite launching with multiple market entry points, startups in this space converge on that singular point. For Bamba, its solution, the intersection of inventory, CRM and payments, will allow it to provide merchants with cash advances against their future cash flow.

“These are businesses that have not previously been lent to because their credit score was insufficient to obtain the appropriate loans. But because we have a pretty accurate picture of our customers in terms of their mobile money cash and receivables, we can make accurate lending decisions for them in a way that hasn’t been done before.”

Bamba is currently in stealth mode and has yet to be released. Gotter said the five-month-old startup is testing its platform with 30 merchants. Your income will come from two sources: a small payment fee paid by merchants and interest from your cash advance/loan product.

“We are well advanced in the research phase and the rapid iteration cycle to discover the initial product that we want to launch on a larger scale in 12 markets,” said the CEO who founded Bamba with Martin Schramm in January.

This seed funding is critical to speed up this process of acquiring more users and scaling the engineering team behind the product. Berlin and San Francisco-based 468 Capital led the round, while Presight Ventures and Jigsaw VC participated along with angel investors such as FairMoney’s Laurin Hainy and Pulse’s Leonard Stiegeler.

Ludwig Ensthaler, a partner at 468 Capital, in a statement, highlighted why his firm backed the Kenya-based startup. He said investment opportunities in enterprise software focused on African small businesses are largely untapped, and Bamba “is well positioned with a great product and strong founder to build a category-defining company.”

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