Fintech

How Flutterwave’s rise to a $3 billion valuation is remarkable for African fintech

Take a flutter on the African tech ecosystem: The Flutterwave debacle - Startup Lagos

$3 billion valuation in 6 years

Just over a year from its rise to unicorn status, Flutterwave has tripled its valuation to a whopping $3 billion after a $250 million Series D raise. The iconic raise last year of $170 million Series C that had brought the startup into the league of billion-dollar companies had been led by Tiger Global. This latest raise, led by B Capital Group, along with Alta Park Capital, Whale Rock Capital, Lux Capital, and others, places the dynamic fintech company as the highest valued African startup, and the first African startup to reach this milestone. Previously, OPay had held this position following its rise to a $2 billion valuation last year after its mega-raise, along with Chipper Cash.

Flutterwave’s growth has been astounding since its unicorn entry last year, with over 140 million processed transactions worth over $9 billion. Launched in 2016, with an expanded presence in over 34 countries in Africa, the fintech giant now processes over 200 million transactions at a collective worth of over $16 billion. The businesses that use its platform have also grown from about 290,000 to a remarkable 900,000 businesses that utilize its payment infrastructure across 150 different currencies and payment methods.

Flutterwave’s phenomenal growth

Flutterwave's growth within the past year has been phenomenal - Startup Lagos
Flutterwave’s growth has been phenomenal in the past year especially. Source: PCTechMag,

This growth had been fueled considerably by Flutterwave’s partnership last year with Discover Financial Services to grow its reach to over 270 million new customers. Other partnerships with fintech giants such as PayPal, Visa, and Worldpay FIS have been instrumental in broadening its reach across Africa’s geographical markets.

These new funds are set to steer Flutterwave’s ambitious expansion plan to accelerate customer acquisition in existing markets. It also intends to consolidate its growth through the development of complementary products while encouraging new innovations in its products and services development. While these growth strategies have helped the company to better position itself in the minds of its expanding customer base, these acquisitions have also served to propel the startup forward. As such, the startup is even more interested in backing more emerging startups, a resolve that is shown in the founder’s support of the $200 million pan-African fund with Norrsken22.

Flutterwave has also been very creative in its growth strategies, especially after its acquisition of the creator platform, Disha, last year for an undisclosed amount, that many pundits opine is strategic in positioning itself within the bolstering global creator economy.

Speaking on the achievement, Flutterwave Founder and CEO, Olugbenga Agboola, says,

Our story is that of resilience and hard work. Our growth so far is due to the support of our customers, our partners, the banks the public, the regulators, and importantly our people.

He further stated how this new funding expresses the conviction that global investors have in the business model of Flutterwave, the team vision and drive, and the African technology market.

Flutterwave’s success: The developing playbook for African fintech

African fintech is succeeding on the continent in leaps and bounds, not simply because of the vast opportunities in banking a large number of the unbanked, but the creative and seamless ways through which these challenges are being solved. Last year, African fintech drew in over 50% of total investments into the continent, continuing its dominance of the startup investment trend in Africa. With this surge in investments year on year, African fintech is even more set to challenge traditional banking and financial service models, especially as more fintech companies veer into the realm of neobanking. With this new valuation, Flutterwave is even more valuable, by at least $1 billion, than most Nigerian banks than it was before when it had hit unicorn status in 2021. This makes Flutterwave the biggest financial institution in Nigeria.

Flutterwave’s success so far stands out, as with other companies in the fintech sector. It proves that African fintech is alive and rich with opportunities. It also shows the deliberate path to growth that many emerging fintech companies and startups may need to tow to attain the same exceptional milestones that Flutterwave has gotten to so far. Flutterwave is blazing a trail, that many other startups in Africa would follow suit. This is remarkable because of Africa’s huge potential in the light of the growing technological penetration across the continent, and the cynosure of attention that Africa’s geographical markets are enjoying at the moment.

However, the growth is still on, and the future will be determined on the omens of the present, on how Flutterwave is able to consolidate its rise as the foremost African startup.

Innovating forward: The future

Matt Levinson, Partner at B Capital further buttresses this point, saying,

In addition to their emergence as the leading enterprise payments processor for the continent, Flutterwave is innovating at breakneck speed with novel fintech solutions for large corporates, SMEs, and consumers. I’ve had the pleasure of backing this world-class team since 2017 and couldn’t be more thrilled that B Capital is leading their Series D.

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.

Questions still emerge as to what exit strategies that the fintech has in the offing or in consideration, especially with tantalizing IPO opportunities in other markets outside of Africa. As Agboola continues,

At the moment, no IPO…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.

It is important to keep our eyes on Flutterwave, as the company shows tremendous potential for even more astounding growth across Africa and even globally.

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