Does Africa Finally Have A ‘Proper’ Local Startup Unicorn In Flutterwave?

Another day, another landmark achievement in Africa’s blossoming tech startup ecosystem. Not too long ago, it was the Nigeria-based fintech startup, Paystack, drawing much fanfare on the backs of a high-profile acquisition.

Today, it’s yet another Nigerian fintech, Flutterwave, recording a rare feat. In a development that has got the entire ecosystem buzzing, Flutterwave has announced a USD 170 Mn Series C round. This values the company at over USD 1 Bn, thus making it the continent’s newest tech startup unicorn, or maybe the first? Well, that depends on who is asked.

Since Olugbenga “GB” Agboola and Iyinoluwa “E” Aboyeji founded the startup in 2016, the YC-backed company, (with offices in Lagos and San Francisco), has built a business out of helping businesses build customizable payments applications through its APIs. To date, Flutterwave claims to have processed USD 9 Bn in over 140 million transactions, catering to 290,000 businesses in 20 African countries.

The just-announced USD 170 Mn Series C tops previous rounds of USD 10 Mn Series A in 2016, a Series A extension round that took Flutterwave’s funding to USD 20 Mn in 2018, and a USD 35 Mn Series B in 2020 which took its total funding to USD 55 Mn.

Shortly before the 2020 raise, Flutterwave was valued at around USD 150 Mn in a Y Combinator list featuring the top 102 most valuable companies that have graduated from the renowned accelerator; it was the only African startup that made the list.

The latest raise takes Flutterwave’s total funding to USD 225 Mn and values the company at over USD 1 Bn. That means the startup has attained unicorn status; a status that is as rare and elusive in these parts as the mythical creature itself.

The list of African tech companies that have crossed the billion-dollar mark in terms of valuations is a very short one; just four of them at the moment, including Flutterwave.

Going further, the list that features “African startups founded by Africans in Africa which have reached a valuation of USD 1 Bn in fewer than 10 years” is even shorter.

The sole occupant of this list is, once again, Flutterwave. Some might even say the continent has finally landed a ‘proper’ African tech unicorn in Flutterwave. And that’s because, unlike the three other tech unicorns registered in Africa so far, Flutterwave is the only one that doesn’t have question marks over either its position as a ‘startup’ or its identity as an “African company.”

When African e-tailer, Jumia, crossed the billion-dollar valuation after a mammoth EUR 360 Mn (USD 435 Mn) series C back in 2016, there was a bit of a debate over whether Jumia was indeed an African company or just a company in Africa.

Although it probably seems like pointless semantics when looking at the big picture, Jumia is known to be incorporated in Germany, has its headquarters in Dubai, has its tech team in Portugal, and is being run by a couple of individuals who are French nationals.

Even though Jumia operates only in Africa (with a presence in 11 African countries) and has an African base in Lagos, Nigeria, many are wont to consider it a bonafide African company.

For the Nigerian digital payments company, Interswitch, which became a unicorn in 2019 after receiving a USD 200 Mn investment from the American multinational, Visa, there are question marks over whether it is in the same weight class as startups.

Interswitch’s CEO, Mitchell Elegbe, founded the company as far back as 2002, and many would argue that the company has long ceased to be a startup.

Similarly, the Egyptian payments company, Fawry, was hardly a startup when it became a billion-dollar company in 2020, a year after going public and some 13 years after it launched.

Obviously, Flutterwave is the only company among the four unicorns currently known in Africa that carries none of that sort of baggage. It’s an actual five-year-old startup founded and run in Africa by Africans in Africa that is now valued at over USD 1 Bn. It’s as African as it gets.

And how about the claim that the African continent has finally landed its first proper tech startup unicorn in Flutterwave?

There seems to be some merit in that claim but an effort to fuss over unimportant semantics would also show that Flutterwave is both a Nigerian and an American company, since it’s incorporated in the United States.

So, really, maybe all that fussy concern about the finer details that qualifies a company as an African startup just doesn’t matter. And maybe Africa does currently have four proper tech unicorns, and counting.

Featured Image Courtesy: Freelancer