In January this year, amateur day-traders sent the internet into a frenzy. They coordinated on Reddit to boost the share price of GameStop, a faltering company listed on the New York Stock Exchange.
Their platform for this operation was Robinhood, a mobile app that allows individuals to buy and share stocks. The sensation has died down but the event showed how ordinary individuals can upend the traditional trajectory of the stock market, causing no small discomfort to hedge funds and speculators.
But the more powerful, more global message was that wealth creation, through investing in stock markets, is possible to people anywhere in the world.
Some startups have taken on the challenge of creating this possibility in Africa. One of them is Bamboo, an app launched in 2019 for Nigerians to buy shares of publicly traded American companies.
Yanmo Omorogbe is Bamboo’s Chief Operating Officer. On TechCabal Live, she explained that the startup’s mission was focused on giving Nigerians a means for growing and earning returns on their investments.
“If you have a little extra money this month and you are able to invest on Bamboo, then maybe next month you have more money to pay for necessities and do other things,” she said.
Bamboo’s app gives users access to buy and sell stocks of about 3,000 companies. Bamboo typically doesn’t offer stocks whose companies have a market cap of under $1billion, unless such stocks have high demand.
Users can sign up to trade on Bamboo with $10 dollars. Users must be at least 18 years old and will need to provide some information, including a bank verification number.
Omorogbe says their users vary. Some have $10 portfolios while there are people with hundreds of thousands of dollars. When there are issues in the global economy that appear to affect stock markets, users are never shy to ask for assurances about their investments.
“Nigerians are quite blunt and vocal. They don’t beat around the bush,” Omorgobe says. “We’ve had people show up at our physical offices to check we are a real company.”
But the company says investments made on the app are always secure. A Bamboo account is technically a US brokerage account because the company partners with DriveWealth LLC, a US brokerage firm, to facilitate its trades.
Flutterwave is Bamboo’s payments partner. The pan-African payments company is responsible for helping Bamboo perform foreign exchange conversions and move their money. Users can deposit into the app in either naira or dollars. In the case of naira deposits, Bamboo does the naira-dollar conversions.
The stock investment industry in Nigeria is new and as such, many people are taking a more cautious approach towards embracing apps like Bamboo. The Securities and Exchange Commission has also started showing an active interest in keeping the startups on their toes.
“Generally, regulation is always a big risk,” Omorogbe said, but they handle it by “letting the people we imagine to be our regulators know what we were doing, asking what their thoughts were.”
Still, she says shocks can happen at any time, creating a need for their business to be resilient and adaptable to situations.
Two years after launch, it’s been mostly good news for the startup so far. As the pandemic drove growth in the retail investing business worldwide, Bamboo has seized the moment to broaden customer acquisition. Their Telegram community currently has close to 7,000 members.
Bamboo’s focus is fully on Nigeria for now, but Omorogbe says they could launch in Ghana and Kenya soon. As to launching new products on the app – for example, investments in local stock markets like the Nigeria Stock Exchange – that depends on what users say will make their Bamboo experience better.
Odunayo Eweniyi, Sim Shagaya, Tokunboh Ishmael, Victor Basta and many other leaders in African tech have appeared on TechCabal Live. Watch all editions on YouTube here.