Since its launch in 2020, Bamboo has announced $19.4 million in VC investment from investors like Greycroft, Tiger Global, Motley Fool Ventures, Saison Capital, Chrysalis Capital, and Y-Combinator’s Michael Seibel.

The co-founders are Richmond Bassey and Yanmo Omorogbe.  Bassey steers the ship as CEO, focusing on the long-term vision and strategic direction of the company. Richmond Bassey CEO. His direct reports aside from Omorogbe,  chief operating officer (COO),  include George Imoedemhe, head of product & engineering, and  Dubai-based Oleg Medvedev who is head of design.  Meanwhile, Omorogbe, chief operating officer (COO), is in charge of the company’s day-to-day operations.

All team leads: Damilola Akinyemi (head of finance), Ebi Wanapere (head of platform), Jennnifer Abah (head of customer experience), Misan Omagbitse (head of people), and Oluwakemi Idowu (head of legal) report directly to her.

This TechCabal Org Chart details Bamboo’s leadership.

If you would like to showcase the leadership structure of your startup in this way, contact the author of this article: ngozi@bigcabal.com.

A few months after Bamboo, an online brokerage app, launched in Nigeria in 2020, CEO Richmond Bassey said it was flooded with emails from Ghanaians requesting access to the app. The waiting list from Ghana grew to 50,000. Two years later, this September, Bamboo opened access to Ghanaians after securing permission from Ghana’s Securities and Exchange Commission (SEC).

Worsening local and global economic conditions mean non-payment fintechs may face more headwinds. But Bamboo’s CEO says he is unfazed by the downturn.

Headwinds build up

Before this round of crises put pressure on Ghana’s economy, an unpopular 1.5% levy on electronic payments had put pressure on revenues for payment companies. 

Ghana’s public market has ranked in the top ten best stock exchanges in Africa in the past three years. In the year-ended 2021, Ghana’s stock market was the second-best performing public market in Africa (investors recorded a 38.59% return in US dollar terms, or +43.66% in local terms). This strong performance has undoubtedly encouraged local investment in Ghana’s publicly traded companies and funds. However, the local bourse has declined by 11.78% between November 2021 and November 2022. 

Coupled with raging inflation and a spiralling cedi, it is a fair assumption that investors may be reassessing their investments or at least investing in more attractive markets like the US. 

Bamboo appears to be banking on this. “Even though the market isn’t doing well, I’d like to think that we are growing because we are educating people that even though it is not doing well, there are opportunities to invest,” community engagement officer, Deola Adebiyi, told African Business in September.

Defying the fate of Robinhood?

Inspired by US retail trading app, Robinhood, Bamboo offers users educational tools including free premium content from popular investment education websites, Motley Fool and mywallst.com. But its main offering is a partnership with US-based DriveWealth LLC that allows Bamboo to buy fractional shares in US-listed companies and funds. Media reports put the number of Bamboo users at 500,000.

According to Crunchbase, Bamboo has raised a total of $32.6M in funding over five rounds, including a $15 million Series A fundraise which was announced in January this year.

But Bamboo’s inspiration, Robinhood, isn’t doing very well. After peaking at 21.3 million in the second quarter of last year, the app’s monthly active users declined to 13.3 million in August this year. Robinhood’s users are also trading less than they did a year ago and the company failed to reach revenue estimates in the last earnings call held just three weeks ago.

With the downturn in publicly listed companies in the US, Bamboo users are becoming more cautious. “People want to invest for the long term,” CEO Bassey told TechCabal. Users now spend more time in the app but are buying less of more, he says. Exchange-traded funds (ETFs) like Vanguard are a growing favourite. 

Unlike RobinHood’s public filings which show a decline in engaged users, Bamboo’s CEO says Bamboo users spend about eight hours monthly on the app, up from just over five hours from the second half of last year. 

An internal report released by the company indicates that users are indeed buying more (in terms of volume) than they are selling. The report does not indicate the value of these transactions.

The economic conditions are “impacting how much people want to invest, not their willingness to invest,” Bassey says. “What we are seeing is that volumes have grown. In the first half of 2022 we’ve seen that trade values have reduced, not the volumes,” he added. For more risk-averse investors, Bassey says his company is considering offering an 8% fixed-yield product to Ghanaian users. The product is currently only available in Nigeria.

In the meantime, Bamboo appears to be doing well in general, but it is not clear if it can replicate its Nigerian performance in Ghana. Bassey believes that growth in new account openings reinforce his belief that there is still strong demand especially since most users appear to be purchasing company shares for the long term.

It is still conceivable that Ghana’s worsening economy can force users to be more conservative as it certainly has for Bamboo’s older peer in the US.

An economy out of order

Ghana is suffering a twin debt and currency crisis. The economy is also struggling through record high 37% inflation. In October, traders closed their shops for three days to protest rising inflation. Joseph Obeng, the leader of the Ghana Union of Traders Association, the country’s largest lobbying group for retailers, told local media that the combined effects of high inflation, exchange and interest rates have “deeply eroded” business owners’ capital by over 50% this year.

From raids on foreign exchange bureaus to Nigerian-style bans on food imports, Ghana’s government is desperately trying to rein in the economy.

The country’s debt servicing is expected to take up 47% of revenue in 2022. Negotiations for a $3 billion IMF rescue program are ongoing as the government scrambles to shore up falling revenues and prop up the value of the Ghanaian cedi. Part of the government’s plan includes encouraging “traders to tone down profiteering which is contributing to inflationary pressures” even as the rising cost of goods bites into profits.

“The sudden major fall of the cedi resulted in panic withdrawal as more customers resorted to convert their investments into dollars,” Richard Duodu, CEO of Financial Mobile Suite, a financial services company with products that span wealth management, lending,  tax administration and payments told TechCabal. Eventually, the withdrawals slowed down after the enterprise clients Duodu’s company serviced implemented “hair cuts”.

“Gradually, customers are getting used to this new reality and can only hope the IMF deal which looks like our only last resort works out the magic we are all praying for.”

But an IMF loan will come at a steep price—a default on $14 billion worth of foreign bonds (basically debt) the government sold to investors in Europe, Africa and around the world. And deep cuts to the government’s budget. Foreign investors are not taking this news kindly. This IMF programme will be Ghana’s 17th since independence in 1957.

IMF’s signature austerity measures may also take time to yield benefits—if any. In the short term, however, Ghanaian citizens and residents will feel the pinch.

One fintech founder told TechCabal via text, that one of his company’s clients, a frozen food business, saw up to 70% reduction in sales due to hyperinflation. “Further investigation showed that the fast-food businesses who mostly patronised this SME couldn’t afford the price of cooking oil—the main ingredient to fry the chicken. This is because oil prices had gone up by 200% in the span of a week. [Cooking oil] is currently selling at 500% YTD,” this founder said.

When Bamboo raised a $15 million series A round in January, its CEO announced that Ghana’s market was the company’s next frontier. Nine months and another $17.4 million raise later, the Ghana plans have become a reality. In a statement shared with TechCabal, Bamboo said it recently received a No Objection Letter from Ghana’s Securities and Exchange Commission (SEC) to operate in the country, enabling it to launch successfully. 

“We believe strongly that all Africans should earn a return on their investments and build intergenerational wealth. That’s why we created Bamboo: we wanted to create an easy and secure way for everyday Africans to invest in the US stock market, and eventually, in all types of asset classes,” said Richmond Bassey, Bamboo CEO and co-founder.

Since its 2019 launch, Bamboo and other retail investment apps providing access to foreign securities like Chaka, Trove and Rise have had to deal with harsh regulatory conditions in their home country Nigeria. In April last year, Nigeria’s Securities and Exchange Commission (SEC) labelled this category of companies as illegal and warned operators in the capital market to desist from operating with them. This was followed by Nigeria’s central bank describing Bamboo as unlicensed and freezing its bank accounts for a while. Despite the struggles, Bamboo has maintained its resolve to work “very closely with regulators in Nigeria,” to ensure mutual satisfaction from both parties. 

Now in Ghana, Bamboo has committed to working with the country’s SEC on an ongoing basis to develop a standard regulatory framework for the retail investment industry Bamboo is pioneering. Through Bamboo’s US digital investing partner, DriveWealth LLC, the Nigerian-born company assures users that all accounts can claim insurance of up to $500,000 via the US Securities Investor Protection Corporation (SIPC). With regulations and insurance in place, Bamboo is ready to make retail investment a norm in Ghana.

Albert Asiamah, 10th Capital Investments COO, was effusive about the performance of Bamboo’s product in Nigeria, describing the investment as ideal and beneficial. 

“We’re thrilled to work with [the Bamboo team] to bring Ghanaians the opportunity to invest in the US and eventually the local stock market. Their impeccable track record in Nigeria, stellar product and educational tools make them an ideal collaborator,” he said.

“Together with Bamboo, we’ve been able to provide investors across Africa with affordable access to the US markets. Today, we’re thrilled to extend that same access to the people of Ghana,” said John Shammas, Head of Technical Sales at DriveWealth. 

“As we continue our international expansion, we look forward to empowering more customers with the tools they need to improve their financial wellbeing and engage with the markets,” he added.

Launched in January 2020 by CEO Richmond Bassey and COO Yanmo Omorogbe, Bamboo has rapidly grown in popularity with retail investors, claiming over 300,000 accounts in Nigeria. Its users can access all equities available on the US 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 in a statement released Monday. 

With the new funding, Bamboo plans to further accelerate its growth, doubling down on unlocking new markets and launching more products, it said while Bassey told TechCabal in an emailed 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 both 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 API solution that allows asset managers, fintech companies, 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.

“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,” Bassey said. “We’re building the technology infrastructure powering financial services in Africa.”

In April 2021, Bamboo announced plans to launch in Ghana and has since seen more than 50,000 Ghanaians join the waitlist, according to the company. In the near future, Bamboo plans to expand into more markets such as Kenya and South Africa, Bassey said.

Compared to developed markets such as the United States, investing in stocks is relatively new in Nigeria, and Africa at large. For instance, nearly 75% of Bamboo users have never traded 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% 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,” Bassey said. “We saw this during the 2020 Covid-19 pandemic crash and we’re seeing it again now.”

Africa’s wealth management market remains largely underdeveloped but holds high potential. According to data cited by Bamboo, Africans account for over 16% of the world’s population, yet they own less than 1% of global wealth.

But that is expected to change over the next decade, with private wealth in the continent expected to increase by 30% 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,” he said. “We are bullish on platforms such as ours in bringing more Nigerians into the world of investing.”

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 August, Nigeria’s central bank received court approval to freeze the bank accounts of Bamboo and other similar Nigerian fintech platforms for a six-month period. However, Bassey confirmed the company received a court order unfreezing its accounts. “All have been unfrozen now,” he said.

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This court order means Risevest has been absolved from any claims that it was involved in speculative activities and cryptocurrency trading after the CBN prohibited it in February.

On the issue of Risevest being involved in trading cryptocurrency, the court even said the circular issued by the CBN isn’t enough basis to sanction Risevest.

The presiding judge on the case, Justice Taiwo O. Taiwo, in his judgement held that the CBN could not rely on a mere circular to freeze the bank accounts of a company using its accounts to trade in cryptocurrency. 

“Being unknown to law, circulars cannot create an offence because it was not shown to have been issued under an order, Act, Law or Statute,” he said.

Risevest’s CEO, Eke Eleanya, told TechCabal that in addition to that, the cryptocurrency transaction being referred to was done in January while the circular came out in February.

Eleanya also said Risevest is still engaging with the CBN to understand how best to comply with its regulatory requirements. 

“The biggest feedback we’ve gotten so far is that the CBN is trying to prevent a lot of speculative activities and maintain control of the foreign exchange market. Their impression of us was that we were doing things that were outside of CBN’s reach,” Eleanya said. 

Explaining how Risevest sources its foreign exchange, Eleanyasaid that Risevest works with payment processors partners like Flutterwave which have a global reach and uses credit lines in the US to make investments. 

“So far, we’ve shown them that we’re not sourcing foreign exchange from official sources and reselling to the blackmarket to make a profit. We’re not contributing to the problem.”

This Risevest win comes a month after the Federal High Court gave a similar order that the bank account of fintech stock trading app, Bamboo,  be unfrozen.

The crackdown by the apex bank could result in severe unintended casualties for the companies; but above all, it puts at risk what is arguably their most valuable asset — customers’ trust.

The global finance industry is built on the foundation of trust. And in Nigeria, where more than 80 million citizens live below the poverty line, trust is even more paramount. Most Nigerians are likely to be skeptical about storing their hard-earned Naira with a digital-only company for extended periods.

And the fintech platforms affected by CBN’s move — Trove, Risevest, Bamboo, and Chaka — know this. 

Beyond offering financial products with attractive investment returns, the startups have invested in building a customer trust and loyalty bank. This has mostly been through providing consistent financial literacy and transparent communication over the years, primarily via emails and Telegram channels.

Each of the fintech firms has thousands of members in its respective Telegram community — Risevest (+12,000), Chaka (+5,000), and Trove (+3,000) — where inquiries and queries are responded to in real-time with opportunities to further educate their users.

News of the embargo on their bank accounts would ordinarily have sparked a frenzy among customers and it did for a moment. Some users took to social media to express their shock and others made moves to withdraw their funds, exhibiting a natural human instinct to fight or take flight when faced with a crisis or an unexpected situation.

But the majority of users have held on, helped by their trust in the companies, which quickly communicated the suspension to customers while assuring them their funds were safe.

“I got an email from Risevest before I even read in the news that their accounts were barred. So I was already calm knowing that my money was safe,” Motunrayo Koyejo, a software engineer and Rise Vest user, told TechCabal. “I don’t think I would have this much confidence if I didn’t get that email.”

While the suspension affected four retail trading apps, there is a tendency that such clampdown can result in contagion; a situation where a crisis affecting some companies spreads to other players in the industry.

Stephanie Osaji, who uses Cowrywise for savings said after seeing news of the court order, she was “scared, thought about my funds and was wondering what would happen to my money” if the platform suddenly shut down.

“To be honest, I considered withdrawing my money. I remember logging into the app and checking when my next due date for withdrawal was,” Osaji said. “But then I just told myself that they would figure it out. I mean Nigerian startups almost always have a way of figuring things out.”

Another Cowrywise user, Mosopefoluwa Okeowo, told TechCabal she thinks fintech startups will always find a solution. “I honestly believe in them totally.”

This sort of consumer confidence is one that takes years to build. Communicating with customers and stakeholders at the very early stages of a mishap is crucial to reassuring their confidence.

Nigerians embracing investment-tech amid economic uncertainty

Africa’s bustling fintech ecosystem has been increasingly defined by payments specialists and digital banks. 

But a crop of wealth management startups has emerged in recent years, the majority helping Nigerians invest in foreign stocks and assets easier than ever before.

Investing in reliable financial assets appeals to many millennials in the country who are keen on hedging their future wealth against the unstable Naira, amid broader economic uncertainty.

With ₦1,000 (around $2), anyone with a smartphone and internet can register on Chaka and browse through over 11,000 shares publicly listed on the Nigerian Stock Exchange (NSE) and stock exchanges in the U.S.

Savings and investment apps also boast superior returns on deposits. Compared to less than 5% interest rates on fixed deposits offered by Nigerian banks, Rise Vest offers a guaranteed 10% annual return on its fixed-income offering.

“I think it’s safer to save money with banks but one gets little or nothing in return,” Koyejo said. “That’s not an option in this economy. I’d rather keep my money and invest with Rise Vest. I don’t plan to use the money I have invested soon anyway.”

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These perspectives aren’t unfounded, as innovators of all shades have taken a heavy beating lately due to a number of direct government policies or interpretations of these policies – irrespective of how well-intentioned these policies may be. On the contrary, micro-investment platforms deserve a fair shot within Nigeria’s capital market.

This is especially true considering that the recent regulatory fervour coincides with a period where the innovation ecosystem is recording new milestones and gaining traction, solving problems for users in all walks of life, democratising wealth creation, and creating high-value jobs, all of which Nigeria desperately needs.

In the last six months alone, Nigerian startups have gained the confidence of some of the best investors locally and globally, leading to never-before-seen innovations, acquisitions, and investments into the economy. This promotes interest in the Nigerian innovation ecosystem from foreign market actors and increases its relevance as a high-value job creator. Some now wonder if our regulators want more or less of this positive momentum.

This latest notice from the SEC warned Capital Market Operators (CMOs) to desist from selling securities not quoted or registered, as only registered securities in Nigeria can be issued, sold, or offered for sale. Ostensibly, the directive requires CMOs registered with the SEC to offer only securities listed on any exchange in Nigeria to the public.

The challenge here is that High Net Individuals (HNIs) in Nigeria have always had access to foreign securities offered or acquired through registered CMOs for the apparent benefits available in markets such as the United States. 

This should be democratised to allow Nigerians with smaller incomes to have access to valuable global stocks within fair rules, and this is what the likes of  Trove, Chaka, Bamboo, and  Risevest have done. 

In fact, this democratisation should be applauded as one of the outputs of a thriving innovation ecosystem that provides practical palliatives for the stifling inflation and erosion of value we have all experienced as Nigerians.

After all, what is suitable for Dangote should also be good for Musa, who earns ₦50,000.00, and thanks to any of the apps mentioned above, can today invest in shares of Dangote sugar while also adding a quarter of a Google stock to his portfolio every month. 

This “magic” of innovation is a poverty alleviator that should be encouraged and nurtured while ensuring that the public is protected from any harmful financial practices.

It is important to acknowledge at this point that the SEC has been a positively progressive regulator, generally engaging its public fairly. The issuance of the guidelines for crowdfunding and accommodation of FinTechs within the capital market was encompassing and engaged stakeholders of all hues. This should be commended.

The SEC’s position classifying crypto as an asset class is also fair, refreshing, and proactive. We need more of this and not less. At a time when we are exploring how the Nigerian capital markets can become a viable option for listing tech startups, this latest body language of the SEC, and the Nigerian government as a whole, can be further misinterpreted.

In the spirit of progressive engagement and dialogue, many voices now suggest that the SEC take a fresh look at its latest position, as these innovations are widespread, publicly accepted, and valuable.

Furthermore, these innovations support some of the registered and regulated CMOs by offering white-label solutions that are accelerating the ability of these legacy CMOs to better serve their HNI customer base, with local and foreign securities.

The emergence of these innovative micro-investing platforms has triggered investments into local Nigerian securities in multiple folds. The volumes these innovative platforms channel into Nigerian stocks are arguably the most significant development in Nigeria’s capital market in a decade.

By virtue of the existence of these innovators, their combined strength has introduced over

150,000 new market participants who are primarily millennials: a majority of whom purchased their first set of stocks through these platforms. Before now, they had no active interaction with the capital market. These new entrants are now trading in excess of ₦10,000,000,000 (Ten Billion Naira) monthly through these apps.

Note that a good chunk of the highlighted trade volume is routed through local CMOs to purchase Nigerian securities on the Nigerian Stock Exchange(NSE). Long term, these innovations would also serve as a channel to offer Nigerian guarantees to a global audience which would be a massive positive for the economy.

The quest for diversification of portfolios to include foreign securities can only be good overall. It underscores the global trend in cross-border trade in securities as disintermediated by technology and the need to enhance portfolios’ value globally.

Rather than curbing the practice of offering Nigerian and international stocks in a basket, this micro-investing trend should be allowed to flourish within reasonable regulatory frameworks. These platforms make investments attractive, easier, and affordable. Micro investing will curb the menace of pyramid and Ponzi schemes while introducing a new generation into Nigeria’s securities market in parallel with their appetite for global securities.

Regardless of what we decide, the world has gotten smaller, and information that enables people to easily seek the best economic outcomes is readily available. While other nations gain from micro-investing, shouldn’t our people do too?

The ultimate beneficiary of increased wealth for Nigerians is the Nigerian economy. Rather than shutting Nigerians off from the rest of the world, we should be accelerating global access for our millions of people; hence this is the time for dialogue, not shutdowns.

Written by Kola Aina, Founding Partner at Ventures Platform. He writes from Lagos, Nigeria.