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How Flutterwave built a Unicorn

Big Tech This Week
How Flutterwave built a Unicorn
By Fatu Ogwuche • Issue #37 • View online
Top of mind: Happy Sunday from Accra!
I’m serving a twist on today’s edition of the newsletter for a deep dive into the journey of Africa’s most valuable startup, Flutterwave.
Founded six years ago, the startup quietly attained unicorn status, but most parts of its history, struggles, and milestones remain unknown.
I spent time with Flutterwave’s leadership team at their offsite in Accra, Ghana, to learn what it takes to build a $3 billion startup in Africa. 
Brace yourselves for a long read. 

How Flutterwave built a Unicorn
Flutterwave CEO Olugbenga "GB" Agboola
Flutterwave CEO Olugbenga "GB" Agboola
The Origin Story
The idea for Flutterwave came during CEO Olugbenga ‘GB’ Agboola’s time as an employee of South Africa’s Standard Bank.
GB: My job was to build transactional products and services for corporate and investment banking partners, and we discovered our partners found it difficult to pay their staff across Africa. I asked my manager why this was difficult since we already had the technology and infrastructure. 
My manager explained that despite Standard Bank’s position as a global bank, each regional subsidiary had its own unique regulatory and judicial issues, making cross-border payments difficult. 
This challenge, GB says, lit a spark in him. He had an idea to build something that would allow businesses to pay and get paid. In addition, he wanted this infrastructure to have a ripple effect on the entire financial ecosystem. 
GB: I knew I could solve this problem, but I didn’t get to work on it right away. I left Standard Bank for Sterling Bank for a brief stint, then joined Google shortly after.
Not many people know this, but after GB left Google, he started a company called PayWithCapture with Flutterwave’s Chief Commercial Officer, Ife “IO” Orioke. A bank eventually acquired PayWithCapture, and Flutterwave’s debut was in full swing.
Naming the unicorn
GB: The butterfly is a tiny insect, but the fluttering of the butterfly’s wings can make waves, and I thought – Flutterwave. I wrote the name down in 2010, and the rest is history.
Flutterwave’s first office was at Capital Square in Lekki. GB ran a one-man show in a shared co-working space. At this stage, he had no co-founder, so he reached out to a good friend and advisor, Leke Adekoya, to offer him the co-founder position. Adekoya helped GB think through compliance infrastructure and business operations.
At the time, GB had been self-funding Flutterwave by wiring funds from his personal account to pay staff. When his account didn’t work, Chief Commercial Officer “IO” would wire him money to make payroll.
How Iyin Aboyeji became the third co-founder
At Flutterwave, Adekoya was the corporate guru with an extensive background in finance, and GB was the product guy whose desire was to build products and cede the CEO title to someone with a startup background. 
GB had met Iyin Aboyeji, the then co-founder of Andela, in the early days of PayWithCapture when he was recruiting an engineer from Andela – making PayWithCapture Andela’s first African customer.
And, as fate would have it, GB learnt Aboyeji had left Andela. So he saw an opportunity for someone with Aboyeji’s institutional knowledge of the startup ecosystem to join the company. 
The two met at Four Points hotel in Lagos, where GB asked Aboyeji to join the team. Aboyeji said yes, coming on board as the third co-founder, complete with equity and a seat on the board.  
Flutterwave’s big break
Ride-hailing company, Uber, launched in Nigeria in 2016 – the same year Flutterwave was defining its core proposition. The team was mulling over two questions at the time – do we focus on SMEs or target large corporations?
GB: Luckily, we didn’t have to answer that question. Uber answered it for us. Onboarding Uber as a client was equivalent to getting over 300 SMEs on the same day because Uber operated as a marketplace where the drivers were the merchants. This way, as Uber expanded across the continent, Flutterwave expanded with it. 
The catalyst
In the early days of Flutterwave, word on the street was that the company was secretly founded by Access Bank, which gave them an unfair advantage. I asked if Access Bank had invested in Flutterwave. GB says Access Bank and its CEO are not investors or shareholders at Flutterwave. He explained that Access Bank was its “first acquiring bank” and helped scale its infrastructure in the early days. 
GB: When we were acquiring Uber as a client, my then boss and CEO of Access Bank Herbert Wigwe, flew to San Francisco with me for meetings with potential clients that would use Flutterwave and domicile their traditional business with the bank. So, there’s no way we [can] tell our story without Access Bank. They took a chance on us and are still one of our biggest partners today. 
Raising capital
Flutterwave’s ambitions required institutional capital to scale, so the company decided to join its first accelerator program. 
GB: We joined the FIS accelerator program in Little Rock, Arkansas, which gave us a $50,000 check. We were interested in FIS because we wanted wider access to the global payment system. So shortly after FIS, we applied to Y Combinator and got in. 
A controversial exit
In 2018, Flutterwave had just closed its Series A round with a valuation of $50 million when one of its co-founders, Aboyeji, left the startup. In a public interview, Aboyeji hinted that differences with his co-founders made him leave the company. 
Some industry insiders hold the opinion that it was a forced exit. However, GB shared that at that time, Flutterwave needed a product and tech-focused CEO to accelerate its offerings. 
More Money, More Problems  
Shortly after Aboyeji’s exit in 2018, the company began fundraising for its Series B round but was hit by unknown attacks on leadership and key employees. 
Flutterwave’s team received anonymous emails over mismanagement of funds and sexual harassment allegations. As the company was trying to understand what was going on, the anonymous email made it to the lead investor, who decided to pull out of the Series B round. 
IO: Series B was interesting because we had successfully grown beyond just trying to figure out this business. We had a strategy, and it felt like we were on the cusp of moving beyond everything that brought us where we were. We needed the capital to catapult us to where we wanted to be. The investors came back to us and said they had received an anonymous email about Flutterwave’s workplace and won’t be moving forward. That was devastating.
Investigating the allegations
Flutterwave lost that investor and did not raise Series B funding until 2020. Shortly after closing its Series B round, the attacks escalated, forcing Flutterwave’s board to commission a U.S. firm to conduct an independent investigation.
The firm conducted an extensive investigation and declared the allegations weren’t credible, clearing Flutterwave of any wrongdoing. 
However, GB shared that the company had dealt with an internal report of sexual harassment before this investigation. As a result, the company investigated and discovered an employee had been inappropriate towards his team members, which led to immediate dismissal. 
In addition, Ernst & Young instituted a workplace safety program for Flutterwave and PWC established a whistleblowing portal for its employees.
Ex-employee lawsuits
GB: You know when it rains, it pours. It was a rollercoaster of multiple things at the same time. An ex-employee who led one of our country expansions sued us for negligence and emotional trauma for not removing their name as the contact person in the country. So anytime there was a merchant enquiry, they were called. They said this was emotional harassment. 
We tried to resolve this amicably, but it was impossible. They asked for $900,000 to quash the lawsuit. We refused because we didn’t believe $900,000 in damages represented the cost of the alleged negligence. They proceeded with the lawsuit, and the judge awarded them an equivalent of $2,500 for damages. When it was time to cut the check, they declined it and said they’d appeal. 
Another ex-employee sued Flutterwave over stock options a year after leaving the company. I’m told stock options are not part of Flutterwave’s standard employment contract – stocks are awarded based on performance, time at the company, or contractually negotiated.
GB said this lawsuit was the price of success for his unicorn company.
GB: We don’t think the employee would have sued us for stock options if we weren’t successful. 
Building the culture 
Flutterwave aspires to be one of the best places to work. Bode Abifarin, Flutterwave’s COO, told me that the company’s culture was shaped by its people and remains a work in progress.
Bode: Before we started, we spent some time trying to craft our vision, mission and core values, but we came in, and we just trashed and junked all of that. And you know, what we did next was very interesting because it took us about maybe five or six months before we finally came up with our next set of core values. We ensured that all the leaders were involved in defining the Flutterwave person and their core values. So we had one person sponsor each core value and define what it meant.
To the Moon
Building generational wealth
 GB: The secret sauce of flutterwave is the people. That’s where we invest the most. We’ve given stock options to over 245 employees at Flutterwave because we genuinely want to build a world-class people infrastructure. Our people are at the core of our decision making as a firm
In addition to this, GB shared that he and other execs write checks to employees who leave Flutterwave to build their own companies. 
Big partnerships and acquisitions 
Flutterwave’s portfolio of partnerships and acquisitions includes an alliance with Alibaba’s Alipay, a strategic partnership with Discover Global, a mobile money partnership with MTN for East Africa payments, and the acquisition of Disha, a fast-growth platform for creators.
In December 2021, Flutterwave announced it had signed Grammy-award winning artist Wizkid as its Global Brand Ambassador on the back of its launch of Send - a remittance product. The partnership would drive the adoption of Send in African diaspora markets. 
For Flutterwave’s SVP Market Penetration & Partnerships, Omosalewa Adeyemi, partnerships are secondary to the prospect of creating value and options for their merchants within their infrastructure. 
O: The thing that brings me joy is being able to join a client’s call and say – you want to launch in 12 markets in Africa? Don’t worry, we got you. Every partnership we do still answers that question of simplifying payments for endless possibilities.
GB: In all honesty, Flutterwave would not be where we are today without a conducive regulatory environment for business in Africa. The Central Bank of Nigeria has built an environment for fintech companies like us to thrive.
Marketing the future
Achieving close to one million sign-ups must have taken quite a marketing effort. So I asked the team’s Head of Product Marketing, Dikachim Nwankwo, and Head of Branding and Storytelling, Wendy Akomolafe-Kalu, about the secret sauce behind their marketing efforts. 
Dikachim: We think about marketing from a human perspective, and our position when it comes to products is that we focus on our customers. So we start thinking about marketing when we are building products. 
Wendy: In thinking about the brand, we look to our values and the community we serve and create solutions for them. For instance, when a tech company laid off 400 workers, we hosted a job fair within three days to connect people to companies. Similarly, we created multiple trade fairs for small businesses within our community. We know that we are nowhere without our merchants, so when we amplify them, it’s a win for them and a win for us. 
Valuation
Many tech industry insiders believe that the African startup ecosystem is experiencing a valuation bubble. I’d acknowledge that the cynics have a point when considering broader macro trends and the high risks of doing business on the continent, so I asked the Flutterwave team how they arrived at their $3 billion valuation. 
The team told me that the opportunity was where the answer lay. For GB, Flutterwave’s valuation reflects the investor’s perception of the opportunity ahead. He suggests the company is still at a discount. 
GB: When you look at the comparables based on what’s happening in the stock markets with companies similar to our size, you see that we have not scratched the surface yet, and that’s what’s interesting about our business. Our valuation is an investor making a bet that we can execute to get where we want to be. We don’t care about the valuation. It is not money in our pockets. However, we have to make that price worth it.
Expanding to the US
When Flutterwave hired Silicon Valley veteran Jimmy Ku as Head of U.S. Growth, the speculation was that the company was getting ready for an IPO. However, while the company did not hire Ku because of the rumoured IPO, Chief Commercial Officer “IO” tells me it did so as part of business development efforts in the U.S., and Jimmy Ku’s work is to get Flutterwave a seat at that table.
An African IPO 
Everyone has eyes on Flutterwave’s journey to an IPO, but the big question is Flutterwave’s approach and what a timeline looks like.  
IO: We cannot put a timeline on it, but one of the things that we’re doing is taking ourselves seriously. We want to be in a position where we can be IPO ready, so we are streamlining processes that make us a world-class company. We are more interested in creating a sustainable business at global standards, and for us, that looks like getting IPO ready. 
Final thoughts: Several opportunities and hurdles still lie ahead of Flutterwave in its ambition to bring Africa to the world through payments.
It’s still Day 1 for Flutterwave, and GB gets this. For him, the scale of the challenge indicates the opportunity for his startup. He says that knowing that many merchants are not aware of Flutterwave’s products shows how “scary” the future growth prospects for the unicorn are. To GB, “We [Flutterwave] are not big. We are small.” 
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Fatu Ogwuche

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