Bamba, a Kenya-based digital bookkeeping platform, has raised a $3.2 million seed round ahead of launch. This round will accelerate the development of its minimum viable product still being tested with 30 merchants.
Berlin and San Francisco-based 468 Capital led the round, while Presight Ventures and Jigsaw VC participated alongside angel investors such as Laurin Hainy of FairMoney and Leonard Stiegeler of Pulse.
Bastian Gotter founded Bamba earlier in January with Martin Schramm – who has built scalable e-commerce and digital finance products – to help merchants record invoices digitally and build a credit profile. Gotter had previously co-founded a IrokoTV, a highly priced video-on-demand provider and after his exit from the VOD provider, he worked as investor with Pawapay, a Kenyan-based fintech learning the intricacies of mobile money.
With Bamba, small and medium-sized enterprise owners can have a digital inventory of their stock keeping units, record invoices, make mobile transactions and ultimately build a credit profile. Using this record, Bamba can determine the creditworthiness of the merchants. Bamba’s android application allows micro-merchants across Africa to run their entire business utilizing their phones. It focuses on simple tools for merchants to manage their customers, get paid, payout as well as takeout cash advances against their future cash flow.
By recording the cash flow of registered merchants, Bamba is able to make accurate lending decisions as the CEO, Bastian Gotter states, “These are businesses that have previously not been lent to as their credit score was insufficient to get the appropriate loans. But since we have a pretty accurate picture of our customers in terms of its cash and mobile money receivables, we can make accurate lending decisions to them in a way not done before.”
Once the five-month startup launches from stealth mode, it will generate income by charging a small payment fee from merchants and from interests accrued from its lending/cash advance products. But until then, the startup remains in a “research phase and quick iteration cycle to figure out the initial product we want to launch at a greater scale in 12 markets,” said the CEO.
According to a TechCrunch report, Ludwig Ensthaler, a partner at 468 Capital, highlighted why his firm backed the Kenyan-based startup. He said the investment opportunities in enterprise software focused on African small businesses are largely untapped, and Bamba “is well placed with a great product and a solid founder to build a category-defining company.”