Flutterwave is a Complete Mess. Does it Truly Have Too Much to Fail?

Abid Hussain

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In the midst of accusations of fraud and security breaches, Flutterwave is intensifying its efforts to expand its global business operations in the United States and Europe.

Africa’s fintech darling is now generating headlines for its smart business decisions, after a year of being in the news primarily for scandals.

Flutterwave revealed three potential business expansion collaborations in June. The company announced on June 6 that it was working with Token.io, a provider of payment infrastructure, to enable its merchants to reach clients in Europe and the United Kingdom. June 21: Flutterwave announced that it would offer payment services to Audiomack, a well-known music streaming platform in the United States. And the business announced the very following day that it had signed a five-year contract with Microsoft to enable Azure transactions throughout the African continent. The partnership between Flutterwave and Microsoft, which will enable payments to and from Africa, “is an incredible opportunity to impact growth across the continent,” the company stated.

Flutterwave CEO Olugbenga Agboola stated in an email to Rest of World that the company is now in discussions for further deals of this nature. He remarked, “We have a partnership that will improve international aviation payments for Africans, and we are building something for education payments.”

These two pronouncements come after a year of Flutterwave-shaking scandals. Allegations of mismanagement, administrative errors, sexual harassment, and security breaches have been made against the corporation since April 2022. Experts, however, feel that Flutterwave—which is practically too big to fail—is likely to overcome the negative publicity and legal challenges because to its size and significance in the African digital industry.

According to Emeka Ajene, a serial entrepreneur and the head of the early-stage investment firm Afri.capital, Flutterwave has established a valuable market position that is difficult to rival, she told Rest of World. Undoubtedly, the organization and its executives have committed some mistakes. Still, the business generates a lot of value for the fintech and payments ecosystem as a whole as well as its current partners, such as Uber and Netflix.

Former Flutterwave investor Zachariah George is a managing partner at the venture capital firm Launch Africa. He told Rest of World that he thinks the fintech company’s standing and stature in the market helped them land these deals. George stated, “Microsoft needs more retailers in Africa to use Azure.” Microsoft thus collaborates with Flutterwave to reach these individuals. In the end, it comes down to volume, and Flutterwave has achieved such a large reach over numerous nations.

Undoubtedly, Flutterwave is still reeling from the controversy. A judge in the Kenyan High Court temporarily banned 45 bank accounts and 10 MPesa mobile money wallets owned by Flutterwave in June, concurrently with the company’s announcement of new collaborations. This came about as a result of a petition that over 2,000 investors filed, alleging that Flutterwave had conspired with 86 Football Technology, a sports betting company, to defraud them of $12.04 million. The claims have been refuted by Flutterwave.

Wings of a unicorn with damage

Founded in Lagos in 2016, Flutterwave helps foreign companies, such as Booking.com and Uber, grow their operations throughout Africa by offering bespoke payment apps via application programming interfaces to small and large businesses operating in the region. With the expansion of its payment infrastructure to 34 nations on the continent, Flutterwave has processed 200 million transactions totaling over $16 billion to date. The company’s service is used by almost 900,000 businesses worldwide to handle payments in 150 different currencies and payment methods.

Following its official unicorn status in 2021, the business raised $3 billion in capital in February from investors including Tiger Global, B Capital Group, Alta Park Capital, and Whale Rock Capital, making it the most valued fintech start-up on the continent.

But a few weeks after making that declaration, the business was the target of some humiliating charges. Early in April, Clara Odero, the CEO of the Kenyan fintech startup Credrails and a former worker at Flutterwave, accused Mr. Agboola of harassing her for an extended period of time and charged the business with negligence that resulted in fraud. Both Mr. Agboola and Flutterwave have refuted any wrongdoing.

Days later, additional accusations surfaced in the local media, claiming that Mr. Agboola had offered lowball prices to Flutterwave employees who wanted to cash in their share options, which went to an investment vehicle under his control, and had created a phantom co-founder identity in order to award himself more shares in the company’s early years.

Such assertions have been rejected by Flutterwave as “false.”

The company released a statement to The Banker stating, “Flutterwave is a private company, and we have followed all legal processes and procedures to allow third parties, including former employees, to sell their shares to other third parties.”

As part of our dedication to running a morally upright business in accordance with all relevant regulations, we take these kinds of accusations seriously and take appropriate action to uphold high workplace standards.

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