Lagos-based startup, Flutterwave, raised $170 million in a Series C round from Tiger Global and Avenir at a valuation of $1 billion. The latest financing, which confirms a Bloomberg scoop from October, brings Flutterwave’s total raise since its inception six years ago to $475 million (it raised a $35 million Series B in 2020 and a $20 million Series A in 2018). At $3 billion, Flutterwave is currently the highest valued African startup, surpassing the $2 billion valuation set by SoftBank-backed fintech OPay and FTX-backed cross-border payments platform Chipper Cash last year.
Led by founder and CEO Olugbenga “GB” Agboola, Flutterwave facilitates cross-border payments transactions of small to large businesses in Africa via one API. The company also helps businesses outside Africa expand their operations on the continent. Some of its international clients include Booking.com, Flywire and Uber. Flutterwave has seen astronomical growth since TechCrunch covered its unicorn round last year. At the time, the payments company said it processed 140 million transactions worth over $9 billion. A year later, the African payments giant, with an infrastructure reach across 34 countries on the continent, now processes 200 million transactions worth more than $16 billion. The number of businesses using its platform has also increased. In March 2021, it was 290,000; now, 900,000 businesses globally use Flutterwave to process payments in 150 currencies and across different payment modes: local and international cards, mobile wallets, bank transfers and its consumer product Barter.
While Flutterwave’s market share in enterprise payments has primarily been responsible for this growth, diversifying into fintech products for small and medium businesses, retail and consumers also played a part. “It was deliberate from us because we saw the opportunity in the SMB space, and how they require the same technology pie the Ubers and Netflixes of this world use,” Agboola told TechCrunch. “Some of this is evident is how we expanded the Flutterwave Store, which allows small businesses anywhere in Africa to create an e-commerce shop online at zero cost scale.” The Flutterwave Store, launched in April 2020, was revamped last November to Flutterwave Market. The e-commerce solution has grown to over 30,000 merchants that consumers can shop from various products. In December, Flutterwave launched Send, a remittance service that allows users to send money to recipients to and from Africa.
Customers use Send — which Agboola called “Flutterwave’s fastest-growing product” — mainly to pay for family support, gifts and tuition, the company told TechCrunch. Send has processed 4,729 transactions, with total payments volume crossing $3.59 million in its first full month of launch. The majority of its customers come from Nigeria, the U.S. and the U.K. “We’re becoming what we wanted to be: the infrastructure for any kind of payments,” Agboola said. “There’s no sector you look at today in Africa that you wouldn’t see Flutterwave taking a piece of that and enabling merchants and consumers to grow and scale.”
After scaling its payments product across sub-Saharan Africa, Flutterwave has expanded its services up north to Egypt and Morocco. Agboola asserted that expanding into these countries is the first step of Flutterwave’s move into emerging markets such as the Middle East and Latin America. “We want to change our focus from just Africa to emerging markets and eventually the U.S., the U.K., Europe. Our goal is to ensure that our infrastructure powers those corridors,” he said. Although Flutterwave has its headquarters in the U.S., it didn’t run any operations there. Most of its U.S.-affiliated business involved striking partnerships with fintech giants such as PayPal, Visa, Discover and Worldpay FIS to facilitate global payments with Africa.
But that changed last August when it hired Jimmy Ku as head of growth to spearhead its expansion into the U.S. Now, Flutterwave operates an ACH network in the North American country with a few customers using the platform to make ACH payments, collections and payouts. In the same vein, Flutterwave launched Grow last September as a product that helps African businesses register and incorporate in the U.S. and the U.K. The new capital gives Flutterwave ammunition to develop more complementary products. It will also help the company speed up customer acquisition in existing markets and grow through M&As, the company said in a statement.
The first public deal Flutterwave made was the acquisition of creator platform Disha for an undisclosed six-figure amount. The rationale behind the purchase was lost on some onlookers because Disha didn’t fit Flutterwave’s core payments business. Though Flutterwave enveloped Disha’s 20,000 creators or businesses (not all were active at the time of acquisition) and intends to play the long game of participating in the global creator economy, the immediate objective of the deal, it seemed, was to salvage a failing startup and back it with a robust payments checkout system.
In the future, Flutterwave will look at acquisitions that will further consolidate its authority in the fintech space. And as the payments giant continues to deepen its influence in the SMB and consumer fintech space, we can speculate that smaller startups — including those it has backed, like CinetPay — may become acquisition targets. “We plan to grow inorganically through acquisitions, and it will happen when we find a fit and see a company with the same core values or culture and goal of making payments simpler across emerging markets. So we still have plans for that,” said the chief executive, who has also backed several startups personally and more recently through the newly launched $200 million pan-African fund Norrsken22.
While some global investors have recently expressed concerns about the valuations of startups in the face of falling public tech stocks, others are increasing their risk appetite and Flutterwave’s deal reflects that reality. Its latest backers in this Series D round include lead investor B Capital Group and participating investors Alta Park Capital, Whale Rock Capital, and Lux Capital. Existing investors such as Avenir Growth, Tiger Global, Glynn Capital, Green Visor and Salesforce Ventures also doubled down.
Stating why his firm invested, Matt Levinson, partner at B Capital, in a statement, said, “Flutterwave may ultimately build one of the most consequential fintech businesses in the world, enabling hundreds of thousands of merchants to transact online and connect Africa to the global economy.”
But as one of Africa’s tech unicorns (currently the most valued of the lot, which includes OPay, Chipper Cash, Andela, Wave and Interswitch) and the poster child for African fintech (a sector that received between 50-60% of venture capital last year), tech stakeholders are counting down to the days Flutterwave will go public. That’s not in the fintech giant’s immediate plans, though, as it looks to continue blitzscaling, according to its chief executive. “At the moment, no IPO,” Agboola said. “The goal is to continue to grow and scale. But obviously, we plan to be IPO-ready from a maturity perspective, which means continue to build the infrastructure, cross our Ts and dot our Is if we choose to go that route.”
This article was written by Tage Kene-Okafor and initially published at techcrunch.com. You can start earning money by becoming our Independent Reporter or Contributor. Contact us at IR@downtownafrica.com
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