Why We Invested: Flutterwave
By Matt Levinson and Priya Banerjee
At B Capital, we seek to back generational companies with broad platform potential. Flutterwave has a unique opportunity to accomplish this as the leading payments infrastructure provider across Africa.
The digital economy in Africa represents one of the largest and most promising opportunities in the coming decade. The continent is home to 1.2 billion people, with an average age of under 20 years and mobile phone penetration approaching 50% of the total population. In 2021, technology adoption in Africa grew faster than in many other geographies (2021 saw 2x the activity witnessed in 2020, and more than 3x the investments in technology businesses). By 2025, the internet economy has the potential to contribute $180 billion to Africa’s economy and grow to $700 billion+ by 2050.
We are witnessing a fintech boom across the continent, driven by increased digital and fintech literacy, access to smartphones, reduced internet costs, and a push to increase financial inclusion and cashless payments. While non-cash payments in Africa remain relatively low (estimated <5%, of consumer payments, relative to 70%+ in the U.S.), the transition away from cash is happening exponentially – with further acceleration driven by COVID in the last two years. Moreover, regulators are leaning into the fast-paced financial technology environment in Africa, and creating policies and regulations that protect the industry, economy, and African consumers.
The problem: Historically, merchants have lacked a single integration for accepting payments across Africa. Consumer payment methods vary by country, with hundreds of banks, cards, and mobile wallet providers across 54 countries. Africa also contains a diverse set of regulatory regimes, requiring payments processors to have licensing in each country they operate in. Moreover, international corporates are wary of handling local currencies and navigating the complex payments ecosystem.
The solution: Flutterwave is building the required payments infrastructure to enable the digitization of the African economy. The company has built integrations with over 500 banks, cards and mobile wallets, providing merchants an easy way to accept and send payments anywhere in Africa. These integrations and the country licenses are often difficult to obtain, providing Flutterwave with unique geographic coverage. By becoming an integral part of African payments infrastructure, Flutterwave is positioned to be at the intersection of African digital payments and e-commerce activity – which are driven by powerful long-term tailwinds that will expand the market significantly in the coming decade.
In the past few years, Flutterwave’s growth across all relevant metrics has been staggering. Today, the company processes over 140 million transactions worth more than $9 billion annually. Hundreds of thousands of merchants use the Flutterwave platform to carry out payments across dozens of currencies. The company also helps businesses outside Africa to expand their operations on the continent, including marquee customers such as Uber, Microsoft, Netflix, Transferwise, PayPal and Booking.com.
Flutterwave is led by a very strong and experienced team. At B Capital, we have been consistently impressed with the company’s ability to recruit a world class team of operators, sales executives, product leaders, and engineers. GB (Founder and CEO) is a payments visionary who is incredibly ambitious, mission-oriented and deeply customer-focused. We are thrilled to partner with GB and his team.
The road ahead: In addition to their emergence as the leading enterprise payments processor for the continent, Flutterwave is innovating at breakneck speed with novel fintech solutions for large corporates, SMEs and consumers. They have launched products such as “Store” to help bring SMEs online (akin to Shopify), “Send” for consumer remittances, and “Barter” for consumer digital wallets. Over time, Flutterwave has the potential to become a multi-product fintech platform, akin to companies like Ant Financial, PayPal, Stripe, and Square.
You can learn more about Flutterwave’s products and future roadmap at their flagship event on Friday, February 18.
We’re beyond excited to be partnering with GB and the entire Flutterwave team in their journey to bring the power of payments technology and financial inclusion to the people of Africa and beyond.