The proliferation of fintech companies throughout Africa stays in full swing as buyers stay bullish in regards to the alternatives that abound within the sector. Today we behold one other unicorn: African payments company Flutterwave introduced that it has closed $170 million, valuing the company over $1 billion.
New York-based non-public funding agency Avenir Growth Capital and US hedge fund and funding agency Tiger Global led the Series C spherical. New and present buyers who participated embrace DST Global, Early Capital Berrywood, Green Visor Capital, Greycroft Capital, Insight Ventures, PayPal, Salesforce Ventures, Tiger Management, WorldpayFIS 9yards Capital.
The Series C spherical comes a yr after Flutterwave closed its $35 million Series B and $20 million Series A in 2018. In complete, Flutterwave has raised $225 million and is among the few African startups to have secured greater than $200 million in funding.
Launched in 2016 as a Nigerian and U.S.-based payments company with places of work in Lagos and San Francisco, Flutterwave helps companies construct customizable payments functions by its APIs.
When the company raised its Series B, we reported that Flutterwave had processed 107 million transactions price $5.4 billion. Right now, these numbers have elevated to over 140 million transactions price over $9 billion. The company, which additionally helps companies exterior Africa to develop their operations on the continent, has a formidable clientele of worldwide corporations. Some of them embrace Booking.com, Facebook, Flywire, and Uber.
Flutterwave says over 290,000 companies use its platform to hold out payments. And in response to the company’s assertion, they will accomplish that “in 150 currencies and multiple payment modes including local and international cards, mobile wallets, bank transfers, Barter by Flutterwave.”
While its web site exhibits an lively presence in 11 African nations, Flutterwave CEO Olugbenga Agboola, often known as GB, instructed TechCrunch the company is dwell in 20 African nations with an infrastructure attain in over 33 nations on the continent.
Last yr was a pivotal one for the five-year-old company. Its second funding got here simply in time earlier than the COVID-19 pandemic hit Africa, negatively impacting some companies however not payments corporations like Flutterwave.
Agboola says his company grew greater than 100% in income throughout the previous yr as a result of pandemic with out giving specifics on numbers. It additionally contributed to its compound annual development price (CAGR) of 226% from 2018.
According to the CEO, this development resulted from a rise in actions in “COVID beneficiary sectors” — a time period utilized by Flutterwave to explain sectors positively impacted by the pandemic. They embrace streaming, gaming, remittance, e-commerce, amongst others. Agboola provides that the company plans to experience on these sectors’ development and proceed in that trajectory.
Besides, Flutterwave’s response in introducing the Flutterwave Store for retailers throughout pandemic-induced lockdowns was instrumental as effectively. The product, which went dwell throughout 15 African nations, helps over 20,000 retailers to create storefronts and promote their merchandise online.
Flutterwave needs to turn into a worldwide payments company, and the Series C funding helps to succeed in that purpose. The company says it plans to make use of the funds to hurry up buyer acquisition in its current markets. It may also enhance present product choices like Barter, the place it has over 500,000 customers, and introduce new choices. One such is Flutterwave Mobile, which within the founder’s phrases “will turn merchants’ mobile devices into a point of sale, allowing them to accept payments and make sales.”
In an announcement, Agboola provides credit score to the company’s greater than 300 employees, buyers, prospects, and regulatory our bodies just like the Central Bank of Nigeria (CBN) for creating the spine for Flutterwave’s success.
For some, it might come off as unusual that the CEO talked about the final stakeholder given the unfavourable and questionable rules it has just lately positioned on fintechs in Nigeria.
However, Agboola thinks the reverse is the case. He makes a daring assertion by saying that beneath the present CBN governor’s present administration, the Central Bank has proven a constant regulatory framework that has allowed fintechs like Flutterwave to thrive.
“Flutterwave, for instance, launched when the governor just came in. We got our license and scaled our business because of a favourable regime that allowed it to be possible. There are so many trailblazing innovations that we don’t talk about a lot about Nigeria, like the BVN and the NIP system. Nigeria has consistently been at the forefront of payments innovation for over a decade, and all it was possible because of the forward-looking CBN policies,” he stated.
On exits, acquisitions, and the billion-dollar membership
One fintech company that has unquestionably championed payments on this timeframe is Interswitch. The payments large is at present price $1 billion after Visa acquired a 20% stake in 2019 and Flutterwave joins the company as the one fintechs in Nigeria to have reached that valuation. This quantity will increase to 4 in Africa when together with publicly traded African e-commerce company, Jumia and Egyptian payments company Fawry.
Flutterwave’s $170 million mammoth elevate and its billion-dollar valuation characterize a landmark achievement for the African startup scene. While the aforementioned corporations’ valuations can’t be disputed, there are query marks on whether or not some are startups or others, African corporations.
Interswitch, as an illustration, was based in 2002, which doesn’t essentially make it a startup regardless of nonetheless being non-public. Fawry was launched in 2007 however didn’t turn into a billion-dollar company till 2020, a yr after going public. Jumia, albeit public, reached unicorn standing as a personal company in 2016; nevertheless, there are various consensus whether it is an African company or not.
Unlike the others, Flutterwave checks all of the packing containers of what a billion-dollar African startup ought to ideally appear to be — based by Africans in Africa whereas reaching a $1 billion valuation in fewer than 10 years.
Most stakeholders in Africa’s tech ecosystem knew this could occur, however the timing anticipated was later quite than sooner. After elevating $35 million in a Series B in 2020, who would have thought Flutterwave was going to boost virtually 5 occasions that quantity the next spherical and be valued at greater than $1 billion the following yr? Maybe simply a couple of.
Well, these numbers hardly ever matter to Agboola, as I ask him what he thinks of Flutterwave’s new development metric. “I’ll say valuation is both art and science. At some point, we were also the most valuable African company at YC, but it’s not really a metric we’re focused on at Flutterwave because they move up and down,” he smiles. “Our key metrics have always been revenue, customer growth and retention.”
Aptly stated, however because the company continues to develop, questions round profitability and exit will turn into extra frequent.
Paystack, one other Nigerian payments company that’s typically in comparison with Flutterwave acquired acquired by Stripe for more than $200 million last year. At the time, there have been additionally rumours of Flutterwave taking the identical route, however this Series C elevate means that the company is just not trying to exit at the second. However, if the YC-backed company certainly does, it could be by an IPO.
“Like every other startup, we’re thinking about ways to create exit tools for our investors. So, a listing is very much in our plans, but for now, we’re focused on giving the best value to our customers,” Agboola stated.
In the course of the company’s journey thus far, it has remained huge on partnerships. In 2019, Flutterwave partnered with Visa to launch Barter and Alipay to offer digital payments between Africa and China. Then final yr, the company introduced a partnership with Worldpay FIS for payments in Africa.
Although Flutterwave has finished this with greater institutions, Agboola says the company will likely be trying to do the identical with smaller corporations, opening the doorways to potential acquisitions.
“We believe in payments in partnership as you have to partner to scale. So, if in the course of making partnerships and scaling and we identify promising companies with a similar ethos and have our vision in mind, that is in making Africa a country, an acquisition isn’t off the table,” he stated.
After capturing a lot of Sub-Saharan Africa, Agboola says Flutterwave’s subsequent plan is to go dwell in North Africa. There, it can probably face competitors from an area chief, Fawry, however that doesn’t matter. The African fintech market is massive sufficient to accommodate a number of gamers.
That’s one purpose why it has additionally been a preferred guess with buyers. The sector, which is each native and worldwide buyers’ high vacation spot, attracted between 25% to 31% of the overall VC funding final yr from various sources.
But from the information on their web sites, that is the primary time Flutterwave’s lead buyers — Avenir Growth Capital and Tiger Global — are backing an African fintech startup. For the previous, Flutterwave represents the primary African startup in its portfolio, however Tiger Global is thought to have invested in Nigerian media company iROKOtv and South African e-commerce company, Takealot.
Via their companions — Jamie Reynolds of Avenir Growth Capital and Scott Shleifer of Tiger Global, each corporations stated they’re backing Flutterwave on its quest to construct a worldwide and world-class payments company.
Looking into the long run, Agboola insists that the company’s focus stays to assist its 290,000 retailers and assist them construct world companies.
“We look forward to increasing our investments across the continent and deepening the impact our platform has on lives and livelihoods as we take more businesses in Africa to the world, and at the same time continue to bring more of the world to Africa,” he stated.