Flutterwave, the African-focused Nigerian fintech startup taking the world by storm has raised $170 million in series C funding, shooting its value up to unicorn status.
The series C, which was led by New York-based private investment firm Avenir Capital and US hedge fund and investment firm Tiger Global, catapulted Flutterwave’s valuation to over $1 billion.
“The company’s valuation is now in excess of $1 billion. The fundraise brings the total investment in Flutterwave to $225 million,” the company said in a statement.
New and existing investors who participated in the round include DST Global, Early Capital Berrywood, Green Visor Capital, Greycroft Capital, Insight Ventures, Paypal, Salesforce Ventures, Tiger Management, WorldpayFIS 9yards Capital.
“We may consider the possibility of listing in New York or a possible dual listing in New York and Nigeria,” Flutterwave CEO and co-founder Olugbenga Agboola told Reuters on Tuesday.
The African-focused fintech said Tuesday the round will be used to further its customer base in existing and international markets and to develop new products. It also intends to improve existing products like Barter, which has over 500,000 users.
It explained that the growth has been spurred by COVID-19 pandemic which accelerated the shift to digital payments in Africa. Streaming, gaming, remittance and e-commerce are among the pandemic-induced activities which spurred Flutterwave’s growth within the last one year.
Flutterwave has carried out more than 140 million transactions worth more than $9 billion since it was founded in 2016, and has raised $225 million to distinguish itself with the few African startups that crossed the $200 million threshold. In 2020; it closed a $35 million Series B round having had a $20 million Series A round in 2018.
The company said more than 290,000 businesses use its platform to carry out payments, adding that they can carry out transactions “in 150 currencies and multiple payment modes including local and international cards, mobile wallets, bank transfers and Barter by Flutterwave.”
Agboola told TechCrunch that the company is live in 20 African countries with an infrastructure reach in over 33 countries in the continent. He said the startup grew more than 100% in revenue within the past year due to the pandemic without being specific on numbers. It also contributed to its compound annual growth rate (CAGR) of 226% from 2018.
The $170 million round underscores the high-flying state of the African fintech market which has attracted between 25% to 31% of the total VC funding last year from many sources.
In 2019, Interswitch recorded tremendous growth with its local-only verve debit card that it moved to internationalize it. The move attracted $63.3 million in debit-financing via bond placement with Securities and Exchange Commission of Nigeria (SEC). Visa bought a 20% stake in Interswitch for $200 million, pushing its value to $1 billion.
But despite its rapid growth, attaining the Unicorn status in less than 10 years after it was founded; Agboola said Flutterwave will not follow the acquisition trajectory but will likely go for listing.
“Like every other startup, we’re thinking about ways to create exit tools for our investors. So, a listing is very much in our plans, but for now, we’re focused on giving the best value to our customers,” he told Techcrunch.
But having been known for its partnership model, which was in play when it partnered with Visa to launch Barter, and Alipay to facilitate payment between Africa and China, and in 2020, Worldpay FIS for payments in Africa, Agboola does not rule out acquisition completely.
“We believe in payments in partnerships as you have to partner to scale. So, if in the course of making partnerships and scaling and we identify promising companies with a similar ethos and have our vision in mind, that is in making Africa a country, an acquisition isn’t off the table,” he said.
Agboola said the company’s next move will be to go live in North Africa, where it hopes to capture more market share even though it will face fierce competition from a local market leader, Fawry.