African fintech Flutterwave has raised $250 million in a Series D round that tripled the company’s valuation to more than $3 billion in only twelve months.
In March 2021, the San Francisco-based Lagos-based startup raised $170 million in a Series C round from Tiger Global and Avenir at a $1 billion valuation. The latest funding, confirming an October Bloomberg scoop, brings Flutterwave’s overall increase since its start 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-rated African startup, surpassing the $2 billion valuation set by SoftBank-backed fintech OPay and FTX-backed cross-border payment platform Chipper Cash.
Led by founder and CEO Olugbenga “GB” Agboola, Flutterwave facilitates cross-border payment transactions from small to large businesses in Africa through a single API. The company also helps companies outside of Africa to expand their operations on the continent† Some of its international clients are Booking.com, Flywire and Uber.
Flutterwave has seen astronomical growth since TechCrunch made its unicorn round last year. At the time, the payment company said it processed 140 million transactions worth more than $9 billion† A year later, the African payments giant, with infrastructure reach in 34 countries on the continent, now processes 200 million transactions worth more than $16 billion.
The number of companies using its platform has also increased. In March 2021 there were 290,000; now 900,000 businesses worldwide use Flutterwave to process payments in 150 currencies and a variety of payment methods: local and international cards, mobile wallets, wire transfers and the consumer product Barter.
While Flutterwave’s market share in business payments has in the first place was responsible for this growth, in which diversification into fintech products for small and medium-sized businesses, retail and consumers also played a role.
“It was intentional of us because we saw the opportunity in the SMB space, and how they require the same tech pie that the Ubers and Netflixs of this world use,” Agboola told TechCrunch. “Part of this is evident in the way we have expanded the Flutterwave Store, which allows small businesses across Africa to create an e-commerce store online at no cost.”
The Flutterwave Store, launched in April 2020, was renewed last November to Flutterwave Market† The e-commerce solution has grown to more than 30,000 merchants where consumers can shop from a variety of 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 processed 4,729 transactions, with total payment volume exceeding $3.59 million in the first full month of launch† Majority of its clients are from Nigeria, US and UK
“Goods become what we wanted to be: the infrastructure for all types of payments,” said Agboola. “There’s not a sector that you look at today in Africa where you wouldn’t see Flutterwave taking some of that and enabling merchants and consumers to grow and scale.”
After scaling up its payment product in sub-Saharan Africa, Flutterwave has expanded its services north to Egypt and Morocco. Agboola claimed that expanding into these countries is the first step in Flutterwave’s move into emerging markets such as the Middle East and Latin America. “We want to change our focus from only Africa to emerging markets and possibly the US, UK, Europe. Our goal is to ensure that our infrastructure powers those corridors,” he said.
Although Flutterwave is headquartered in the US, it has not conducted any operations there. Most of its US-affiliated business includes high profile 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 its head of growth to lead the expansion into the US Now, Fluttergolf operates an ACH network in the North American country with a few customers using the platform to make ACH payments, collections and withdrawals† In a similar vein, Flutterwave launched Grow last September as a product that helps African companies register and incorporate in the US and UK†
The new capital gives Flutterwave ammunition to develop more complementary products. It will also help the company accelerate customer acquisition in existing markets and grow through mergers and acquisitions, the company said in a statement.†
The first public deal Flutterwave made was to acquire the maker platform Disha for an undisclosed six-figure sum.† The rationale behind the purchase was lost on some onlookers because Disha didn’t fit into Flutterwave’s core payments business. EAlthough Flutterwave encased Disha’s 20,000 creators or companies (not all were active at the time of acquisition) and plans to play the long game of participating in the global creative economy, the immediate purpose of the deal, it seemed, was to rescue a failing startup and back it up with a robust payment checkout system.
Going forward, Flutterwave will look at acquisitions that will go further consolidate its authority in the fintech space. And as the payments giant continues to expand its influence in the SMB and consumer fintech space, we can speculate that smaller startups — including the startups it has backed such as CinetPay — could become acquisition targets.
“We plan to grow inorganic through acquisitions, and it will happen when we find a fit and see a company with the same core values or culture and purpose of making payments easier in emerging markets. So we still have plans for that,” said the CEO, who has also personally and more recently supported several startups through the recently launched $200 million pan-African fund Norrsken22.
While some global investors have recently expressed concerns On startup valuations in the face of declining public technology stocks, others are increasing their risk appetite, and Flutterwave’s deal reflects that reality. The latest backers in this Series D round are 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.
Matt Levinson, partner at B Capital, explained why his firm invested in a statement: “Flutterwave could eventually build one of the most immersive fintech companies in the world, enabling hundreds of thousands of traders to transact online and connect Africa to the global economy.”
But as one of Africa’s tech unicorns (currently the most valued party, including OPay, Chipper Cash, Andela, Wave and Interswitch) and the banner for African fintech (a sector that received 50-60% of venture capital last year), stakeholders to the days when Flutterwave goes public. That’s not in the fintech giant’s immediate plans, though, as it looks set to continue blitzscaling, according to the chief executive.
“No IPO at this time,” Agboola said. “The goal is to continue to grow and scale. But apparently, we plan to be IPO ready from a maturity perspective, meaning we will continue to build the infrastructure, cross our T’s and mark our Is if we choose to go that route.