IROKO co-founder Bastian Gotter raises $3.2M for new venture, Bamba – TechCrunch

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In 2010, Bastien 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 transforming IROKO – having raised over $30 million from VCs including Tiger Global – into a household name on the entertainment and technology scenes in Nigeria.

Gotter left the media company in 2017, an exit that allowed him to resume full time angel investment and pursue new projects. Gotter has cut checks in Paystack, Flutterwave and betPawa and co-runs Spark, an investment vehicle he launched with Njoku.

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

Gotter is an investor and board member of PawaPay, roles that can be active and passive depending on who is involved. For Gotter, it was more about the latter, and so in January he began exploring other opportunities in the mobile money payments space, particularly relating to small businesses. This led him to start Bambamobile business software for African micro-traders, which raised $3.2 million.

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

“They also saved stock components and had some form of customer relationship management on WhatsApp. It wasn’t a consistent picture and it was just a big mess,” he said on a call to TechCrunch. “And that’s when we finally saw an opportunity to launch Bamba.”

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

The platform includes business management software and an Android application that provides tools for micro-traders to manage their business. Its features include managing customers, recording stock levels, and receiving and executing payments.

“Merchants can record the cash and mobile money transactions they collect, as well as 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 wanted to improve fundraising for merchants primarily through USSD and M-Pesa to pay the point-of-sale invoice numbers.

“We have the inventory management components that are tied to the number and the goods sold. Then payments eventually led to point-of-sale type devices like Square or Yoco that allow you to get a clearer picture of your business and activities.

Lack of credit is a thorn in the flesh of traders globally; this is more true in sub-Saharan Africa, where the credit gap for small businesses amounts to more than 300 billion dollars. This is a prominent area where the digitization of accounting proves its utmost importance for traders. And DDespite launching with different market entry points, startups in this space are converging on this singular point. For Bamba, its solution crossing inventory, CRM and payments will allow it to provide merchants with cash advances on their future cash flow.

“These are companies that have not been loaned before because their credit rating was insufficient to obtain the appropriate loans. But since we have a fairly accurate picture of our customers in terms of liquidity and mobile money receivables, we can make accurate lending decisions to them in a way that has never been done before,” said the CEO. .

Bamba is currently in stealth mode and has not yet launched. Gotter said the five-month-old startup was testing its platform with 30 merchants. Its revenue will come from two streams: a small payout fee paid by merchants and interest from its loan/cash advance product.

“We are very far into the research phase and the rapid iteration cycle to determine 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 integral to accelerating 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 alongside angel investors such as FairMoney’s Laurin Hainy and Pulse’s Leonard Stiegeler.

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

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