These African start-ups had an
extraordinary year last year, after they raised about $5 billion, surpassing
the record of the previous year of $4.3 billion. Nigeria happens to be the
biggest beneficiary of seed rounds and other venture capital secured on the
continent last year.
In late January, a Nigerian tech start-up
with an investment platform that allows Nigerians to trade in United States
(U.S.) stocks in real-time from their mobile phones or computers, Bamboo,
raised $15 million in a Series A funding round led by American venture capital
firms Greycroft and Tiger Global.
Motley Fool Ventures, Saison Capital,
Chrysalis Capital, and Y-Combinator’s Michael Seibel also participated in the
round, the company had said.
Last August, the Central Bank of Nigeria
(CBN) got a court approval to freeze the bank accounts of Bamboo and other
similar Nigerian fintech platforms for six months. The accounts have since been
unfrozen by the court.
Launched in January 2020 by CEO Richmond
Bassey and COO Yanmo Omorogbe, Bamboo has grown in popularity with retail
investors, claiming over 300,000 accounts in Nigeria. Its users can access
equities on the U.S. stock exchanges, that is, the stocks of roughly 6,000
companies
“Our goal is simple: we want to give
Africans and their asset managers easy, fast and secure access to global
investment options that will allow them to earn real returns,” Bassey said.
With the new funding, Bamboo said it plans
to further accelerate its growth, doubling down on unlocking new markets and
launching more products, it said in response that Bamboo will be providing more
asset classes and investment opportunities for its users.
“Bamboo is enabling Africans to build
wealth by creating an investing platform that is helpful to experienced
investors and to those new to the stock market. We are thrilled to support the
innovative, user-first approach the Bamboo team is bringing to market,”
Greycroft Partner Alison Lange Engel said on the investment.
Last year, the company launched Powered by
Bamboo, its app programming interface (API) solution that allows asset
managers, fintechs, and other financial institutions to plug into Bamboo’s API
to provide their customers access to global securities. The company has been
testing the product with a small group of companies and expects to onboard more
this year.
Bassey said: “Everyone building for African
investors is welcome. We plan to add other products and tools that offer
greater access and make global investing simpler from Africa.We’re building the
technology infrastructure powering financial services in Africa.”
Last April, Bamboo announced plans to
launch in Ghana and has since seen more than 50,000 Ghanaians join the waiting
list, according to the company. In the
future, Bamboo plans to expand into more markets such as Kenya and South
Africa.
Compared to developed markets such as the
U.S., investing in stocks is relatively new in Nigeria, and Africa. For
instance, nearly 75 per cent of Bamboo users have never trade stocks before.
Thus, the company has had to put significant
effort into educating its users on how to invest and become better investors,
using a mix of regular educational content published on its social media, a
stock market course, an investment bootcamp, newsletters with investing tips
and exclusive value-added services from top investment advisors like The Motley
Fool and MyWallSt.
These efforts appear to pay off, going by
Bamboo’s figures. In 2021, repeat depositors made up 85 per cent of deposits on
the platform, an indication that Bamboo users are rapidly gaining confidence in
trading US stocks.
But with the US equities market
experiencing its worst January in well over a decade—since 2009—how are Bamboo
users reacting to the downturn?
“Even though they are new to stock
investing, Bamboo users tend to handle their emotions like more seasoned
investors. We saw this during the 2020 Covid-19 pandemic crash and we’re seeing
it again now,” Bassey said.
Bamboo allows Nigerians buy and trade US
stocks in real-time from their mobile phones or computers.
Bamboo allows Nigerians buy and trade US
stocks in real-time from their mobile phones or computers.
Africa’s wealth management market remains
largely underdeveloped but holds high potential. According to data cited by
Bamboo, Africans account for over 16 per cent of the world’s population, yet
they own less than one per cent of global wealth.
But that is expected to change over the
next decade, with private wealth in the continent expected to increase by 30per
cent to reach $2.6 trillion by 2030, according to AfrAsia Bank.
Bassey is upbeat platforms like Bamboo will
play a major role in realising the projected growth, by helping to develop an
investing culture among Africans.
“We think investing in stocks has a bright
future in Nigeria. Nigerians are hungry to earn a return on their investments
and build wealth. We are bullish on platforms such as ours in bringing more
Nigerians into the world of investing,” he said.
Without revealing many details, Bamboo says
in the statement it plans to make it seamless for African investors in the
diaspora to discover the best investment opportunities on the continent.
In February, a payments technology
processor, Flutterwave secured $250 million in Series D funding at a valuation
of $3 billion.
The round was led by B Capital Group, with
participation from Alta Park Capital, Whale Rock Capital, Lux Capital, and a
number of other investors.
The company helps merchants accept payments
both online and at the point-of-sale (P0S) through a host of methods, including
cards, mobile money and bank transfers.
Founded by entrepreneur Olugbenga Agboola
in 2016, Flutterwave has processed over 200million transactions worth over
$16billion to date across 34 countries in Africa. It now serves over 900,000
businesses across the globe.
The company says the new funds will be
utilised to grow its product suite and drive its expansion plans by
accelerating customer acquisition in existing markets and growth through merger
and acquisition (M&A).
Partech in its 2020 report had rated
Nigeria, Kenya, Egypt, South Africa and Ghana as investment destinations in
terms of attracting funding for start-ups
A
Nigerian platform launched in 2018 by Connected Analytics, ThankUCash,
as a multi-merchant loyalty and cashback platform that connects customers with
businesses in a bid to help businesses grow and help customers to earn some
cash on every purchase made.
In January, the Lagos- based start-up
revealed that it raised $5.3million to expand within the Nigerian market. It is
currently eyeing the Federal Capital Territory and the Southern city of Port
Harcourt. 500 Global and Unicorn Growth Capital co-led the seed round.
The CEO Simeon Ononobi started the firm
alongside Suraj Supekar, Madonna Ononobi and Harshal Gandole.
Another start-up is Reliance Health. The
firm is a health care startup founded in 2016 by three co-founders who want to
redefine health insurance.
On February 7, the startup announced
raising a $40million Series B round, the largest in African health tech. It was
led by General Atlantic.
Reliance Health uses software, data science
and telemedicine to deliver health insurance services.
Femi Kuti, Opeyemi Olumekun and Matthew
Mayaki are the founders of the Lagos- and Texas-based digital healthcare
service provider.
Investment platform, Bamboo raised
$15million in a new financing round. In January 2020, Richmond Bassey and Yanmo
Omorogbe founded Bamboo an investment platform.
The investment firm had announced that it
had raised $15million in a new Series A round backed by Greycroft and Tiger
Global.
Another Nigerian tech startup, SeamlessHR,
raised $10million to expand its human resource and payroll solutions across
Africa.
In January, the company which was founded
in 2018 by Emmanuel Okeleji, the Chief Executive Officer and Chief Technical
Officer, Deji Lana said it raised $10million Series A funding led by TLcom
Capital and other investors like Capria Ventures, Lateral Frontier Ventures,
Enza Capital and Ingressive Capital participated.
Casava, a Nigerian digital insurance
platform founded by Bode Pedro early February 2022 also raised $4million to
make insurance affordable and accessible to Nigerians.
Casava is an offshoot of VisaCover, an
insurance brokerage company founded in 2014 by Bode.
The company provided an alternative in the
auto insurance market allowing weekly insurance payments instead of the yearly
conventional payment.
The founder built Casava in 2019 and
launched fully in April 2021 after it secured a license to provide affordable
and accessible insurance products to Nigerians.
Startups in the Edutech space did not miss
out as AltSchool which was launched in October 2021 raised $1million in pre-seed
funding to scale-up in business.
AltSchool was founded by Chief Executive
Officer Adewale Yusuf, Akintunde Sultan and Opeyemi Awoyemi.
The start-up is an online school with a
curriculum to improve/upskill non-technical people with technical and soft
skills.