Africa’s top fintech player is getting ready for an IPO

Flutterwave, the Nigeria-based digital payments company and Africa’s most valuable startup, has made changes to its corporate team as part of moves aimed at preparing for an initial public offering, its chief executive told Semafor Africa.

Olugbenga ‘GB’ Agboola, speaking at Semafor’s World Economy Summit in Washington D.C. on April 18, described Flutterwave’s hopes for a public offering as part of a broader future agenda. “Right now our goal is to be IPO-ready, ensuring we have the right corporate governance in place, making sure we are operating well,” Agboola said. “We want to be a long-term company in Africa, for Africa – and so the goal is building the right infrastructure to be here for the next ten-plus years.”

Flutterwave’s core product is processing online payments, enabling businesses to receive payments from consumers and businesses operating in Africa. It currently operates in more than 30 countries, according to Agboola, with Uber being a flagship client on the continent. Key among the company’s milestones for being IPO-ready are recent hires, including a new board chair, two independent directors, and experienced executives to fill roles needed to “translate tech speak” for regulators, Agboola said.

The hires come on the back of a number of high-profile departures in recent months. An ex-American Express executive who was Flutterwave’s chief finance officer left after two years last November, while a chief operating officer who had been in her role for six years left in March.

The exits raised doubts about the company’s readiness to go public, as have operational lapses like the loss of tens of millions of dollars through supposed unauthorized transactions allegedly carried out by vendors in Nigeria. A court permitted the company to contact the vendors to begin recovery of the money lost in October.

It remains unclear what timeline Flutterwave has for an IPO. About 85 companies may list on the tech-inclined NASDAQ exchange this year, which would make 2024 busier than last year. Reduced global venture capital activity has led to slower investment into African tech startups, with deal totals falling by nearly half in the first quarter of this year. Big ticket investors like Tiger Global and Softbank, whose checks partly fuelled Flutterwave’s $3 billion valuation, are taking a break from Africa.

In the meantime, Flutterwave is focused on improving communications and active engagement with African regulators, who have been doing “a lot of listening” in the last two years, Agboola said.

Flutterwave has endured some friction with regulators, especially in Kenya where the asset recovery agency banned the company’s accounts in relation to a fraud investigation. But there has been progress elsewhere, like in neighboring Rwanda where the company received two licenses last year.

On potential acquisitions, Agboola played down the possibility that Flutterwave may acquire a Nigerian bank. “We believe fintech can complement banks properly and that synergy is great for value,” he said.

Flutterwave has come a long way since it opened shop just eight years ago in Lagos. It has grown rapidly with a series of groundbreaking funding rounds for African startups at the top of the market in 2021, raising just under half a billion dollars. Its last major round saw it achieve a valuation of $3 billion — the highest ever for an African tech startup. Ever since then, speculation has grown over when the fintech company would go public. The fervor isn’t just about Flutterwave. The entire African tech ecosystem has placed their hopes on Flutterwave being the one that proves Africa can produce world class tech companies that can return potentially huge profits to investors. Doing that successfully would, of course, be a massive boost to rivals and supporters alike.

But the journey hasn’t been easy. Flutterwave has suffered the growing pains of any young company, except on steroids because its huge funding and industry expectations mean everything gets amplified. It has run into governance speed bumps, cross border regulatory challenges, internal scandals, and plain old operational mishaps.

In our brief on-stage interview, Agboola, who has started to make more public appearances in recent times, seemed keen to show caution and a willingness to work closely with regulators. He acknowledged that in the past there perhaps had been a desire to move fast and break things, as the saying goes in Silicon Valley. The challenge with that approach in Africa is there often aren’t enough things to break in the first place.