Online share trading service Bamboo carried on what has been a busy start of 2022 for Nigeria-based startups today, securing $15m in from investors including financial information provider The Motley Fool and payment services firm Credit Saison.
Corporate venturing units Motley Fool Ventures and Saison Capital took part in the series A round alongside Greycroft Partners and Tiger Global Management, which co-led the transaction, as well as Chrysalis Capital and Michael Seibel, managing director of accelerator operator Y Combinator.
Bamboo runs an online platform allowing users to fractionally invest in some 3,500 businesses listed on stock exchanges in the United States, similar to the likes of eToro or Robinhood. It has now raised $17.4m since it was founded in 2019, according to TechCrunch.
The service has accumulated more than 300,000 users who can buy and sell shares either through US dollars or local currency the naira, but the option to invest in dollar-based assets is useful given a annual inflation rate of about 16% in Nigeria, and the shares are held at a local and US brokerage.
Richmond Bassey, co-founder and CEO of Bamboo, said: “We are building the technology infrastructure powering financial services in Africa such that if you are investing in the global capital markets from Africa, you will be doing so using Bamboo, directly or indirectly.
“We also want to make it seamless for African investors in the diaspora to discover the best investing opportunities on the continent. We are excited about our work with local regulators so far to make this a reality.”
The deal is a marker for an increasingly active financial technology scene in Africa centred on Nigeria. The number of startups to have raised funding in 2021 increased over 40% year on year to 161, according to Pitchbook data.
A total of $915m was raised by venture capital-backed companies in 2021, a considerable increase from the $123m secured the previous year as well as the $341m which had proven an earlier high point, in 2019.
Interestingly, mobile payment app developer OPay was responsible for a hefty share of that figure itself, having received $400m from investors including telecoms and internet group SoftBank in August.
Mobile wallet developer PalmPay, digital sports betting service BetKing and online business-to-business marketplace TradeDepot also closed large rounds, collectively making up much of the rest of the funding. All four businesses operate mobile-first businesses surrounding the consumer fintech space.
Developing nations have proven fertile ground for fintech due to relatively large proportions of unbanked citizens who are amenable to mobile accounts.
Nigeria however represents a particular opportunity due to its 206 million population – almost double that of any other country in Africa – and a high birth rate, making over 60% of its 206 million population aged 24 or under according to the CIA World Factbook.
The large raw numbers of young users unused to legacy banking and consumer products signify a potentially huge market for local startups, coinciding with global growth in that space influenced by the covid-19 pandemic and its attendant lockdowns.
Bamboo’s series A is the largest round disclosed by a Nigeria-based company so far in 2022 but nine others have raised cash, almost all in the fintech space. They include a $17m round for cash management platform developer Float and a $10m round for payroll software provider SeamlessHR.
None of the 2022 rounds so far have taken place later than series A stage, but what is perhaps more significant is that the Bamboo deal represents the first African investment disclosed by either US-based Motley Fool Ventures or Singapore-headquartered Saison Capital, indicating that international corporate venturers are now taking a keen interest in the space.
