Flutterwave Is Forging Ahead With Going Public Despite Setbacks
Flutterwave, a notable African fintech player specializing in payment solutions, is advancing with its ambitions for an initial public offering (IPO) despite grappling with allegations of financial misconduct in Kenya.
Olugbenga Agboola, the CEO and co-founder of Flutterwave, believes that going public will attract clients seeking a high level of regulatory compliance and a global perspective, reports Bloomberg following a recent interview with the founder in London.
Since its establishment in 2016, Flutterwave has rapidly expanded its footprint across nearly 30 African countries. The company has conducted successful funding rounds, including one in January of the previous year that significantly increased its valuation to USD 3 B. Notable investors in Flutterwave include Tiger Global Management and high-profile corporate partners such as Alibaba’s Alipay, Uber, and Netflix.
Agboola dismissed claims that the company neglected former employees’ stock rights and mistreated staff members, asserting that these instances were isolated and wouldn’t hinder the planned IPO. The company has secured initial regulatory approval to operate in Kenya, a strategically significant market on the continent.
While Agboola acknowledges the current challenges within global financial markets, he emphasizes the company’s commitment to enhancing corporate governance as it pursues its IPO aspirations. Flutterwave is headquartered in Lagos and San Francisco but has encountered hurdles such as harassment allegations and the freezing of its Kenyan bank accounts due to anti-money laundering regulations. The company has been working to address these issues and ensure regulatory compliance.
Apart from the fraud allegations, the fintech firm has also been rocked by alleged security breaches. In February, an incident unfolded on Flutterwave’s platform where certain accounts were reportedly compromised, leading to substantial losses exceeding USD 3.6 M in customer funds. Initially dismissing the claims, the company indicated that it had detected an “unusual trend of transactions” among specific users, prompting a thorough examination. Subsequently, in legal documents, Flutterwave acknowledged the occurrence of a security breach.
Flutterwave’s business performance remains promising still. Its payment processing business, facilitated through its SendApp application, experienced exponential growth, reporting a 23-fold increase in the first half of this year compared to the same period in 2022. Furthermore, payments processed through point-of-sale devices saw a more than fivefold increase, while the company’s small and medium business unit witnessed a nearly fourfold jump in revenue.
Agboola envisions Flutterwave’s expansion across its current markets and contemplates potential acquisitions to extend its market reach. The company’s goal is to establish itself as the most reliable platform for both merchants and consumers across the African continent, he says, leveraging the substantial growth potential inherent in Africa’s rapidly evolving business landscape. Despite the challenges and complexities it faces, Flutterwave remains steadfast in its commitment to growth and its aspiration to conduct a successful IPO.
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