Less than a year after Flutterwave became a unicorn through a mega-round co-led by Tiger Global, nine mostly US investors have co-invested $250 million at a $3 billion valuation, believing that this six-year-old African fintech company will eventually dominate its market.
In a statement, Flutterwave said the money will be used for expansion and customer acquisition, by looking for companies to buy or invest in and creating products that amplify the value of its payment processing business. Actually, the company has had these plans for a while, especially since its big raise last year, and has executed quite a bit on them; it bought Disha, a faltering Nigerian ecommerce startup and co-led a $2.4 million investment in a payment gateway for Francophone Africa. Perhaps its most eye-catching move was signing Grammy-winning star Wizkid as a brand ambassador, leveraging his cult following to launch a remittance service.
The pace of execution has paid off in more customers—over 900,000 businesses served globally today versus 290,000 a year ago, according to the company—and more money with which to stay relentless.
“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,” said Matt Levinson, partner at B Capital Group, a California-based firm that first invested in the startup in 2017 and led the latest round.
African fintech is a hotly contested field of companies that started with one product but steadily tweaked their blueprints for bigger dreams. In doing so, they are beginning to compete directly with each other as platforms. For example, Flutterwave’s venture into remittance places it in an arena that already included Chipper Cash, and MFS Africa, two of the continent’s most well-funded companies.
But Olugbenga Agboola, Flutterwave’s CEO, believes his team always wanted to be more than just a payment processor, that they “set out to build a platform that simplifies payments.” (In 2019, they launched an app in partnership with Visa that provided users virtual dollar cards for online payments.) Indeed, Levinson says a company’s “broad platform potential” is one of his firm’s investment criteria.
A platform approach has extended Flutterwave’s view beyond financial services, to creating a business incorporation vertical for Nigerians who want to register businesses in the US and UK. In this, the company is being as broad-based as Stripe, Silicon Valley’s favorite payments company, than even Paystack is.
Signing Wizkid was only one of Flutterwave’s major marketing commitments in 2021. It was the official payments partner for Nigeria’s basketball team at the Tokyo Olympics, but made an even bigger bet by signing a multi-year sponsorship deal with the Basketball Africa League.
How much is spent on these deals is a secret and measuring effects is only speculative without reviewing the company’s backend for before and after data. But as we learned from Super Bowl LVI, spending to reach an engaged sporting audience can spike interest to the extent of crashing a website.
And so when Flutterwave identifies customer acquisition across its 34 markets as a budget item for its new $250 million warchest, one can imagine they are currently on the hunt for lifestyle events with a massive, sticky audience in Africa.
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