African payments giant Flutterwave is making a strategic push toward a highly anticipated initial public offering. The Nigerian enterprise, recently recognised by Fast Company as the Most Innovative Company for Europe, the Middle East, and Africa, is a symbol of the continent’s burgeoning tech landscape. As Flutterwave readies itself for the public spotlight, the company is bracing itself for the intense scrutiny that comes with being a publicly traded company.
Olugbenga “GB” Agboola, the founder and CEO at Flutterwave, told the Semafor World Economic Summit in Washington, D.C., in April that the company was aware of what it needed to do to buttress itself for the public markets and that it was in process in addressing those elements.
“Right now our goal is to be IPO-ready, ensuring we have the right corporate governance in place, making sure we are operating well,” Agboola said at the summit. “We want to be a long-term company in Africa, for Africa and so the goal is building the right infrastructure to be here for the next 10-plus years.”
Flutterwave’s Focus
Sources familiar with Flutterwave’s internal discussions reveal a focus on fortifying its corporate governance structure. The company is actively recruiting seasoned professionals with experience in navigating the complexities of public markets, which have significantly higher financial disclosure thresholds and more governmental oversight than private entities.
These new hires bolster Flutterwave’s expertise in areas like financial reporting and regulatory compliance, crucial aspects for any company seeking investor confidence. This emphasis on governance aligns with the comments above by Flutterwave’s Agboola, who acknowledged the need for improved structures following leadership departures.
Flutterwave recently made hires in several of those roles, including a new board chair, experienced executives who speak the Silicon Valley parlance, and two independent directors.
While Flutterwave may have some hatches to batten down for the IPO, its growth story has been nothing short of remarkable. Valued at an impressive $3 billion, it’s become the undisputed leader in African payment solutions, empowering businesses across the continent with seamless transaction capabilities. Its reach extends beyond the African market, with partnerships established with tech titans like Microsoft and Token.io, further solidifying Flutterwave’s position as a leading player in the global fintech arena.
However, this rapid ascent has not been without its challenges. Recent alleged financial losses and high-profile exits from the leadership team have raised concerns about the company’s readiness for the rigors of public life. Investors, ever vigilant, are also closely monitoring the broader African tech startup ecosystem, which has witnessed its share of growing pains.
Despite these headwinds, Flutterwave remains confident in its IPO prospects. Its core business, facilitating payments for African businesses continues to demonstrate strong performance. Additionally, its innovative financial solutions continue to foster trust with key regulatory bodies, which is a major concern.
Flutterwave’s commitment to transparency, coupled with its strategic recruitment efforts, serve as strong indicators of its dedication to long-term success, something the company hopes regulators recognise.
The upcoming IPO is a defining moment not just for Flutterwave; it could also serve as a bellwether for the entire African tech scene. A successful listing could act as a catalyst, attracting much-needed capital and inspiring a new wave of entrepreneurs.
The IPO market has been at something of an impasse lately, regardless of how well positioned the company looking to go public is. After a feeding frenzy in 2021 and the beginning of 2022 that included not just a rash of IPOs but also of special purpose acquisition companies, rising interest rates locked up capital markets, including venture capital, to the point where many companies postponed potential IPOs.
What had been almost “free money” with capital market rates at record lows turned into the opposite. Coupled with dissonance in valuations (during more robust economic times, companies are often valued a bit above what they should, and the opposite occurs in down markets), it was hard for companies that were prepared to go public to do so, as they’d enter the market at a valuation lower than what they would have liked.
The success of Flutterwave’s IPO will hinge on its ability to address these concerns effectively. By demonstrating strong corporate governance, financial transparency, and a clear path to profitability, Flutterwave can not only secure its own future, but also pave the way for the broader African tech ecosystem to thrive on the global stage.
