Grace Ashiru
Flutterwave, Africa’s top-valued startup and a leader in digital payments based in Nigeria, has updated its corporate team in preparation for a forthcoming initial public offering, according to the company’s CEO. Speaking at Semafor’s World Economy Summit in Washington D.C. on April 18, CEO Olugbenga ‘GB’ Agboola discussed the strategic steps Flutterwave is taking toward a public offering. “Our current objective is to be IPO-ready by establishing robust corporate governance and ensuring efficient operations,” Agboola explained. “Our aim is to be a long-standing enterprise in Africa and for Africa, hence we are focused on developing the necessary infrastructure to support our vision for the next decade and beyond.”
Flutterwave, primarily known for its online payment processing capabilities, allows businesses to accept payments from both consumers and enterprises throughout Africa. According to Agboola, the company is currently operational in over 30 countries, with Uber as a prominent client on the continent. Aiming for IPO readiness, Flutterwave has recently made significant appointments including a new board chair, two independent directors, and seasoned executives to effectively communicate with regulators, as noted by Agboola.
These strategic hires follow a series of notable exits from the company. Last November, the chief finance officer, a former American Express executive, departed after a two-year tenure. Additionally, the chief operating officer, who had been with Flutterwave for six years, left her position in March.
The departure of key personnel has cast uncertainty over the company’s preparedness for its upcoming public offering. This sentiment is further compounded by operational missteps, including the misplacement of tens of millions of dollars due to purported unauthorized transactions conducted by vendors in Nigeria. In response, a court has authorized the company to initiate contact with the vendors to commence the recovery of the lost funds as of October.
The timeline for Flutterwave’s potential IPO remains uncertain. This year, approximately 85 companies are expected to debut on the tech-heavy NASDAQ exchange, indicating a busier 2024 compared to the previous year. Meanwhile, a decline in global venture capital activities has impacted investment in African tech startups, with funding in the first quarter dropping by nearly 50%. Major investors like Tiger Global and Softbank, who previously contributed to Flutterwave’s $3 billion valuation, have temporarily halted investments in Africa.
Flutterwave is currently concentrating on enhancing communication and maintaining active engagement with African regulators. According to Agboola, these regulators have been notably receptive, engaging in “a lot of listening” over the past two years.
Flutterwave has faced some challenges with regulatory bodies, particularly in Kenya where the asset recovery agency froze the company’s accounts amid allegations of fraud. However, progress has been made in other regions, such as Rwanda, where Flutterwave was granted two licenses last year.
Regarding potential acquisitions, Agboola downplayed the likelihood of Flutterwave purchasing a Nigerian bank. He emphasized that fintech has the capability to effectively complement banks, which he believes is beneficial for creating value.
Flutterwave, established just eight years ago in Lagos, has quickly ascended the ranks of the tech world. By 2021, it had made headlines with multiple significant funding rounds, amassing nearly half a billion dollars, marking a historic achievement for African startups. Its latest funding round catapulted its valuation to $3 billion, setting a new record for African tech companies. This milestone has fueled widespread anticipation about when the fintech giant will enter the public market. Flutterwave’s journey isn’t just a singular success story; it symbolizes the broader potential of the African tech sector to produce top-tier tech enterprises that deliver substantial returns to investors. Such an achievement would not only validate Flutterwave’s strategy but would also uplift its peers and bolster the entire ecosystem.
Flutterwave’s journey has been anything but simple. As a fledgling company, it has experienced the typical growing pains, but these have been magnified due to substantial funding and lofty industry expectations. The company has faced governance hurdles, cross-border regulatory issues, internal scandals, and straightforward operational setbacks.
In a recent brief on-stage interview, Agboola, who has been more visible publicly lately, appeared cautious and expressed a readiness to collaborate closely with regulators. He admitted that there was previously a tendency to “move fast and break things,” a common mantra in Silicon Valley. However, he noted that this approach poses unique challenges in Africa, where there are often not as many “things” available to break.
