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How Young Nigerians Built Flutterwave, A $1 Billion Silicon Valley-Based Tech Firm
The PUNCH tells the story of young Nigerians who developed the rave-of-the-moment tech comany, Flutterwave.
Congratulations are in order for Nigerian payments technology company, Flutterwave, which recently clinched a $170m grant, raising the fortunes of the company to over $1bn within a space of less than five years.
The story of Flutterwave broke the Internet a couple of weeks ago, inspiring many youths to consider careers in the financial technology space.
Launched in 2016 by Olugbenga Agboola, fondly referred to as GB, Flutterwave, with its operational head office in Lagos State and its corporate headquarters in San Francisco, the company rapidly grew in such a short time, leaving many wondering about the vast opportunities that abound in the fintech ecosystem in Nigeria.
The company, now valued at $1bn, helps businesses build customisable payments applications through its Application Programming Interface. The company’s technology-based payment solutions focus on the African market. It plugs technology into the ecosystem players such as the banks, telecommunication companies and other players that are looking to accept or make payments.
Unlike other bigwigs in the fintech space in Africa such as Interswitch; publicly-traded African e-commerce company Jumia and Egyptian payments company Fawry, which took more than 10 years to reach a billion-dollar valuation, Flutterwave achieved the status quickly in less than five years.
Speaking with Sunday PUNCH, Flutterwave Investor Relations and Business Manager, Kanyinsola Ajibade, narrated the billion-dollar journey of the company started by a team of ex-bankers, entrepreneurs and engineers led by Agboola.
She said, “We started with Uber, which was our major customer, and is still one of our major markets. From Uber, we have grown to become one of the major payment service providers across all of Africa, which is really awesome and has shown the growth in which we have been able to build our business and the trust that mobile companies have placed in our business for us to deliver excellent services.
“We process payments for over 200,000 merchants that use our API, including the likes of Uber. Our payment infrastructure covers over 33 countries.
“One thing that we have always stuck to is to simplify payment and we started reconnecting financial infrastructure in Nigeria by building our technology into all the financial institutions in the market. This was easy for us to do because the banks wouldn’t talk to each other.”
According to her, the banks preferred working with a fintech or a payment technology company.
“By the time we were working with Nigeria, which is the biggest economy in Africa, we wanted to be able to provide these services for multiple markets; we wanted to be able to make a business person in Nigeria accept payment from a customer in Nairobi, Kenya without the customer in Kenya worrying about going to a bank to make an international transfer.
“That is how we started to build out and that made us expand within our second to third year to Eastern Africa and, in our third and fourth years, we expanded into countries in Northern and Southern Africa. It doesn’t matter what the geography is or what the current infrastructure is, our goal is to make payment seamless.
“Right now, we are operating in over 10 countries across West Africa, North, East and Southern Africa. Our infrastructure can process in over 33 countries, but there is no limit to the currencies our clients and their customers can process on our platform,” Ajibade added.
Commenting on the Series C funding recently acquired by the company, the Flutterwave executive said the company anticipated wider expansion with the funding.
New York-based private investment firm Avenir Growth Capital and US hedge fund and investment firm Tiger Global led the Series C round. The Series C round comes a year after Flutterwave closed its $35m Series B and $20m Series A in 2018. Flutterwave is one of the few African startups to have secured more than $200m in funding.
But what does this feat mean for Flutterwave? According to Ajibade, this translates to the company being able to do more of what it has always done.
She added, “That means expanding into more countries, building on our infrastructure, pushing our services from the 33 countries I mentioned to 50-100 – a deeper penetration in the market we are already existing in, rolling out new innovative products for customers to take advantage of. With the new funding, we will be able to deliver better products, better efficiency all around.”
When asked whether the expansion would include going into mainstream banking, Ajibade responded in the negative, saying the company did not see itself going in that direction anytime soon but would continue to facilitate payments.
“We don’t hold funds; the banks do. We hold licenses as a technology payment service provider,” she added.
Speaking on Flutterwave’s relationship with the Central Bank of Nigeria and other regulators, the executive noted, “In our operations, we have always wanted to have an open relationship with the CBN in terms of how we are creating our products, in terms of how we are incubating, in terms of how we are.
“Our position has always been to be fully cooperative with the regulators because we want to build that rapport with them. Fintech has always been a proponent for change, so, even when we are launching, we reach out to key stakeholders in the ecosystem and, in some cases, we make presentations as well,” she said.
Ajibade also highlighted how the lockdown occasioned by the coronavirus pandemic impacted on the company, with more businesses opting for online payment solutions.
“For this period, we can say our business was impacted because we make money when our business customers make money. We want to make sure businesses leverage our infrastructure to create their own infrastructure to build solutions around education, around logistics. That is another backbone for us to build solutions that will help grow the country’s economy,” she explained.
Agboola, the Flutterwave CEO, in an interview with TechCrunch, also attributed the company’s growth to an increase in activities in “COVID beneficiary sectors” — a term used by Flutterwave to describe sectors positively impacted by the pandemic. They include streaming, gaming, remittance and e-commerce, among others. He added that the company plans to ride on these sectors’ growth and continue in that trajectory.
The serial entrepreneur has over 15 years of experience in building scalable fintech firms. He was instrumental in leading the development of fintech solutions for several organisations and financial institutions such as PayPal, Standard Bank and Google, among others.
He has been named the African Leadership Magazine’s 2020 Young Business Leader of the Year. GB has been recognised for his achievements in leadership and innovation by Fortune Magazine’s prestigious 40 under 40 list and Time Magazine’s 2021 Next 100 list, respectively.
With the huge imprint by Flutterwave on the global fintech industry in the last few years, there’s no telling what the future holds for technology-based startups birthed by innovative Nigerian minds such as Agboola.