By OBINNA EZUGWU
When around 2016, a small team of tech savvy entrepreneurs led by a young Nigerian techpreneur, Olugbenga Agboola, alias GB – a software engineer and serial entrepreneur who had contributed to the development of fintech solutions at several tech companies and financial institutions, such as PayPal, Standard Bank, among others, started out – from their small room in Nigeria’s commercial capital, Lagos – on a journey to unite the whole of African continent through an efficient payment system, it was an audacious dream that must have seemed to the ordinary mind like attempting to capture a blue whale with a fishing hook.
It was by all accounts an audacious move captured in ‘Flutterwave,’ the very name of the venture. Flutterwave was conceived to have the butterfly effect of the chaos theory in the African payment system: conceived to replicate the very idea that a fragile butterfly fluttering its wings in one obscure part of globe, could trigger a series of reactions and ultimately lead to a hurricane.
The whole essence being that though the butterfly does not power or directly create the hurricane, the flap of its wings can constitute the initial trigger of an inter-connected complex web; one set of conditions leading to a swirling hurricane.
This effect, GB, who serves as the company’s Chief Executive Officer, says himself and his team set out to create in the payments system with Flutterwave. While it may have seemed like audacious attempt in 2016 the dream is today a practical reality even as the co-founder insist, the present is only the beginning.
“The butterfly effect refers to a situation where a small change in one state has an impact on a bigger change in the future. For example, the flapping of a butterfly’s wings in one location, eventually leading to a tornado in another,” GB said in a piece last week.
“We got our name ‘Flutterwave’ from this understanding. When we were starting Flutterwave, we knew that the name would go before us so we needed a name that would speak to our huge and monumental future while embodying our little beginnings.
“It all started in a small office space in Lagos, Nigeria – with only a handful of us as a team. We thought of ourselves as a formidable team; a team that did not take “No” for an answer; a team of doers, movers, thinkers, builders and most importantly ‘wavers’.
“We had a goal; to unite Africa through payments. We needed to make the continent feel like a country. We needed to unlock doors of opportunities for the over 500 million young people in this beautiful continent. Have we been able to achieve it? Well, we are just beginning.”
Nigeria’s tech space has continued to witness tremendous growth, particularly in the fintech category. Around the same time the Flutterwave dream was hatched, two young Nigerians, Shola Akinlade and Ezra Olubi started out on a project that would grab global headlines four years later. Both founded Paystack, a fintech that makes it easy for organisations of all sizes to collect payments from around the world.
Last year, a U.S based financial services and software service company, Stripe reached an agreement to buy it over in a deal worth over $200 million. At the time, Paystack had around 60,000 customers, including small businesses, larger corporates, fintech; educational institutions and online betting companies, some of which include telecoms giant, MTN; Domino’s Pizza; insurer, Axa Mansard, betting platform, Bet9ja among others.
The Paystack deal helped to announce Nigeria’s status as one of Africa’s biggest fintech destinations for Venture Capital money. Of all VC funding raised by African tech start-ups in 2019 totaling $2bn, Nigeria attracted a record high of $747m in tech investment, some 37% of all funding, according to U.S-based Partech, a global investment platform for tech and digital companies.
The Paystack deal had come a year after Visa paid $200 million for a 20% stake in Interswitch, another Nigerian digital payment platform founded in 2002 by Mitchell Elegbe. Interswitch confirmed, after the deal, that it had reached unicorn status – a valuation of $1bn or higher – after the Visa acquisition.
Flutterwave, with over 290,000 clients, has become the second Nigerian based Africa focused fintech company to achieve the enviable status, and is determined to take it a notch higher. Earlier in the month it disclosed in a statement that it had secured $170 million in capital injections from investors, valuing the company over $1 billion.
Facilitated by “a leading group of international investors,” the financial inflows, the company had said, will bolster its client base in the global market.
New York-based private investment firm Avenir Growth Capital and U.S. hedge fund and investment firm Tiger Global led the Series C round. Other new and existing investors who participated include DST Global, Early Capital Berrywood, Green Visor Capital, Greycroft Capital, Insight Partners, Salesforce Ventures, Tiger Management, Worldpay FIS and 9yards Capital.
“The fundraise brings the total investment in Flutterwave to $225 million and is one of only a very small number of African fintech companies to have raised significant funds in a period of widespread disruption and economic uncertainty,” the company had added in a statement.
The Series C round had come a year after Flutterwave closed its $35 million Series B and $20 million Series A deals in 2018. In total, Flutterwave has raised $225 million, one of the few African startups to have secured more than $200 million in funding.
GB said the fund will to improve the company’s technology, product, grow customers’ support, expand to new frontiers as it continues to provide support needed for everyday mom-and-pop shops to sell to global markets. But for him it’s only a step in what, according to him, has been a remarkable journey.
“I have to say that our journey has been quite remarkable – not only did we start from scratch to build a payment product never built before, but we did this in a space that was so fragmented that someone in Rwanda didn’t have an efficient way of sending money to someone in Nigeria, before 2016,” he said.
“It has taken a lot of grit, dogged determination and an irrefutable belief in our ability to achieve this dream. It took trust when there was nothing to trust except gut feelings. It took respect. It took resilience, consistency and devotion to a dream of creating endless possibilities for the continent.”
He added, “Tomorrow, we set out to sail; with a stronger belief in our mission to simplify payments for endless possibilities.
“Are we nervous? Maybe a little; but are we convinced of our natural ability to do what has never been done before? Definitely! It’s all unfamiliar terrain but we hope to come out on the other side of things, with our heads held up, knowing that we came, we saw, and we conquered.”
But more was yet to come for a company that is now effectively on its way to becoming Africa’s leading payment platform. Last week, Flutterwave announced a new collaboration with global payment leader PayPal, to enable PayPal customers globally to pay African merchants in the continent through Flutterwave’s platform.
The collaboration, the company said will be instrumental in supporting SMEs and freelancers to overcome the many challenges presented by the highly fragmented and complex payment and banking infrastructure, as well as connecting them with more than 377 million PayPal account holders globally.
The new collaboration is expected to unlock opportunity for African businesses to do business around the world.
“As we build the largest payment infrastructure in Africa we also know that Africa does not exist in isolation. We need to connect Africa to the world when it comes to payments and we took a closer step to that today,” GB noted via his twitter handle @TechProd Arch on Tuesday.
“Today, we are announcing an important step towards achieving our mission and goals. We @theflutterwave have collaborated with @PayPal to allow businesses in Africa receive payments from over 377 million @PayPal users all over the world.
“This removes the restriction for African merchants to accept PayPal because once you have @theflutterwave for business,PayPal is now one of your payment types.”
The deal, which tech experts assert is the real big one, brings the company much closer to its ultimate goal of facilitating seamless payments across the African continent.
“This is actually even a bigger deal than the Series C announcement. We are now in prime time” remarked Osaretin Victor Asemota, @asemota, Growth Partner at AnD Ventures and IBM HyperProtect Accelerator.
Indeed Flutterwave has continued to position itself as the answer to the challenges of suitable payments system, which had beset Africa’s ecommerce ecosystem, and the collaboration will significantly eliminate barriers that have previously hindered African consumers and businesses from the untapped potential of cross-border ecommerce.
The company continues to transform the payments space in Africa by offering flexible, quick and affordable payment services to individuals and businesses across the continent.
Further speaking on the partnership earlier, Agboola said: “We are excited to bring PayPal’s fully integrated services to businesses across Africa. The collaboration reinforces our vision of creating a seamless digital payments system for Africa’s business communities that can now transact with international consumers.
“By working with PayPal, we can further strengthen our commitment to our customers and service users as we will be enabling them to transact and expand their business operations to reach new markets. PayPal’s global reach is unrivalled and collaborating with them allows our customers to explore new markets where PayPal is embedded.
“Through our collaboration with PayPal, we are also bringing together two trusted global payment brands to provide millions of consumers and businesses a gateway to new opportunities,” he said.
Since inception, Flutterwave has processed over 140 million transactions worth over $9 billion worldwide and continues to expand its footprint to ensure consumers and merchants receive the best-in-class digital payment service.