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Fintech leader Flutterwave is looking to boost acquisitions in sectors that bolster its digital payments network to become a one-stop shop for African business and consumers, the company’s CEO told Semafor, following an investment round that included an equity stake purchase by the US blockchain firm Ripple.
The Nigeria-founded Flutterwave works in 35 African countries, helping businesses receive digital payments. It has recently expanded to consumer remittances, and in April it secured a Nigerian micro-banking license that allows it to hold customer deposits. The new funding round takes Flutterwave’s value to $3.25 billion — an 8% jump from 2022 — which CEO Olugbenga Agboola said will help its ultimate goal of being the go-to fintech for “any type of business” in Africa.
“What you will see us start doing is a lot of M&A. We think we can consolidate African payments into one,” Agboola said, declining to disclose how much Ripple invested or how much the company has raised in total. Earlier this year, Flutterwave acquired Mono, a Nigerian startup that was once backed by US investor Tiger Global that provides access to consumer financial data to third-party financial service providers.
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The Ripple investment will include a full integration of its stablecoin, a type of dollar-pegged cryptocurrency, into Flutterwave, adding to the available options for digital payment clients in Africa. The investment will also allow Flutterwave to integrate Ripple’s business-focused blockchain platform into its system.
The deal comes at a time of rising interest in stablecoins in Africa. Consumers face a constant threat of high inflation, readily exacerbated by external shocks such as the Iran war, triggering a demand for safe currency stores. Stablecoins are helping to fill this need, and also help to secure international remittance and allow for rapid payments, especially useful for businesses.
In Nigeria, which accounts for about 60% of stablecoin inflows into sub-Saharan Africa, the tokens have “offered both a hedge against currency risk and a tool for paying overseas suppliers,” IMF executives said this week. The global supply of stablecoins has grown 40-fold to more than $270 billion since 2020, which investors say underscores their “massive real-world applications in traditional finance” that go “far beyond crypto trading.”
In Africa, there is “real customer demand” for frictionless cross-border payments that can be completed in real time, a welcome alternative to multi-day waits generally required for international payments with traditional fiat currencies, Agboola said, adding that Flutterwave provides and will look to add other stablecoin payment options beyond Ripple. Last year, the firm enlisted US tech company Polygon Labs to be the default blockchain platform powering its consumer remittance product, Send App.
Step Back
Flutterwave has disclosed nearly $500 million in investment from firms such as Visa, Mastercard, Salesforce, and Tiger Global in the 10 years since it started doing business. The last time it raised money, four years ago, its $3 billion valuation made it the highest-valued startup in Africa.
Agboola has said he is eyeing an IPO for the firm, sparking investor buzz that comes amid calls for “big exits” in Africa’s startup ecosystem to help grow the pool of investors and capital available.
But details on Flutterwave’s possible listing have been scant, and a new private funding round extends the timeline for an IPO. However, Agboola insists going public remains a target. “We definitely would love to list in Nigeria as a starting point. We have received inquiries and that ambition is still there,” he said. The company’s current focus is to “go deeper not wider, do some M&A and keep growing the business,” he added.
Notable
- Flutterwave’s Agboola did not rule out the possibility of a sale to larger fintech player, in an interview with Semafor a year ago.