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

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

Over the next few years, as CFO, Gotter played a key role in making IROKO – after raising more than $30 million from VCs, including Tiger Global – a household name in Nigeria’s entertainment and tech scenes.

Gotter left the media company in 2017, an exit that gave him the opportunity to start investing in angels full-time and pursuing new projects. Gotter has discounted checks in Paystack, Flutterwave and betPawa and is co-manager of Spark, an investment vehicle he co-launched with Njoku.

In 2018, he started a nursery school chain 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 25 telecom operators and enables merchants from 10 countries to receive and send payments between mobile money accounts.

Gotter is an investor and board member in PawaPay, roles that can be active and passive depending on who is involved. It was more of the latter for Gotter, so in January he started exploring other mobile money payment options, especially those related to small businesses. This led him to start Bamba, a mobile business software for African micro merchants, which has raised $3.2 million.

After spending some time in Kenya (where he was now used to paying via mobile money and rarely cash), he found that businesses relied heavily on manual bookkeeping and lacked software to record their cash and mobile money transactions.

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

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

The platform consists of business management software and an Android application that provides micro-traders with tools to run their businesses. Its functions include managing customers, recording inventory levels, and receiving and making payments.

“Merchants can record which cash and mobile money transactions they collect and their cash and mobile cash payouts. And with that initial registration, we have a gateway to the business,” said Gotter, who also mentioned that Bamba wants to improve merchant fundraising primarily through USSD and M-Pesa account numbers at the point of sale.

“We have the inventory management components that match how much and what goods are being sold. Then the payments ultimately result in point-of-sale devices, such as Square or Yoco, that give you a clearer picture of your business and your operations.”

Lack of credit is an eyesore worldwide; this is more 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 is paramount for traders. and dodespite launching with different entry points to the market, startups in this space converge at that one point. For Bamba, his solution, which crosses inventory, CRM and payments, enables merchants to provide cash advances against their future cash flow.

“These are companies that have not been loaned out before because their credit score was insufficient to get the right loans. But since we have a pretty accurate picture of our customers in terms of cash and mobile 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 yet to be launched. Gotter said the five-month-old startup is testing its platform with 30 traders. The income comes from two streams: a small payment fee paid by merchants and interest on the loan/advance product.

“We are very deep in the research phase and fast iteration cycle to figure out which first product 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 technical team behind the product. Berlin-San Francisco-based 468 Capital led the round, while Presight Ventures and Jigsaw VC participated along with investors like FairMoney’s Laurin Hainy and Pulse’s Leonard Stiegeler.

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

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