‘Flutterwave‘ is a Fintech company based out of Lagos and headquartered in San Francisco. It was founded in 2016. It promotes cross-border transactions of small to large businesses in Africa via a single API. The service is great as money is saved in digital format and gives protection from theft. Theft is common in Africa and the digital money feature is leading to increasing adoption in the continent. The company has obtained ISO 27001 & 22301 Certification, which indicates adherence to strong processes. It was also featured in TechCrunch the previous year. Recently the company raised series D funding of $250 million. This takes it’s valuation to over $ 3 billion. It is currently the highest values startup in Africa, which is amazing. The total fund raise since inception amounts to a whopping $475 million.
Are they doing something out of the box that is enabling them to garner higher funding? It seems so as it is definitely aiming to go beyond the payments domain. It has an infrastructure reach across 34 countries of the African continent. The founder and CEO ‘Mr. Olugbenga Agboola‘ recently commented the following, while launching “Flutterwave 3.0”. He said – “We’re growing and for us, payments have become a means to an end. Our new identity is a system that recognizes how far we’ve come in our mission. It gives us space to include all of our dreams and aspirations for businesses and customers. It gives us the freedom to do and be more. We’re excited for this new chapter in our growth”.
Let us see what are the major overhauls being planned.
1. Fintech as a service ( FaaS)
FaaS infrastructure will now allow other companies to leverage on ‘Flutterwave’s’ APIs to enhance their own product or service capabilities . It will most likely spur a lot of innovation going forward.
The bundled tech stack includes KYC, account opening, debit card issuance, payments, and real-time transfers through a single service channel. Account servicing and compliance have been included as well.l will also help small businesses to avoid high capital expenditure in infrastructure, having an in house IT team, compliances and licenses for operations.
The companies leveraging the solution will be able to bypass a lot of grunt work like
The platform helps transfer virtual dollars and issue Naira cards. It also makes expense management easier for businesses by giving employees easy access to per diem and wellness program of the client organization through it’s cards.
3. SME lending
The SME lending product will be driven by ‘Flutterwave Capital‘ via it’s lending partners viz. CashConnect Microfinance Bank, MoneyWise Microfinance Bank, Wema Bank, Zenith Bank, Stanbic IBTC Bank, and Sterling Bank. The entire lending process is aimed to be completed in less than 2 days. Now businesses will be able to easily access credit upto $20,000, without lengthy documentation, collateral or rigid terms and conditions. The repayment is based on reducing balance method, which makes credit more affordable to small businesses. Africa generally has interest rates upwards of 20% p.a. However, the reducing balance will certainly help to a certain extent. The repayments can be made daily by small businesses as a fraction of daily sales which hit the wallet, thus easing out the fatigue that normally sets in.
Currently these SME loans are being provided in Nigeria. In future the outreach will include South Africa, Kenya and other countries as well.
The ‘Grow‘ product has a goal of simplifying the process of registering and incorporating a business in the US, UK or Nigeria from anywhere within 3 to 5 business days. It has a B2B model and claims to have removed the complexities of paper work and legal procedures. Businesses also receive an instant corporate account and an international business card for free. These businesses also receive access to all in one dashboard, wherein they can manage customers, inventory, payments, orders. There is also a waitlist for this service.
The ‘Checkout‘ product aims to minimize dropped transactions by providing a seamless experience. The company claims that the dropouts are reduced by 60% and the service is 5X faster. Countries outside Africa like USA , UK and rest of EU are also relieved of complex checkout processes of other solution providers. It means more business for those using this service.
‘Flutterwave‘ is attempting to create a payment ecosystem in the African continent and it has been successful at it. This ecosystem, will serve as a backbone for small businesses in the region. It is interesting to note that it’s partners include some of the biggest micro finance banks, who are already helping small businesses in a big way. It is a win-win for both ‘Flutter wave‘ and these micro finance banks. Traditionally African businesses had limited access to transactions outside borders. But this is changing as the company also offers a market place, which can be implemented easily through it’s platform and is used by over 30,000 merchants. The company has expanded payment options for it’s client’s by adding the widely adopted Google and Apple Pay. It makes transferring money all the more easier. It is also supporting African youth by organizing job fairs and connecting talent with other companies. It is now expanding to emerging markets like Middle East and Latin America. It’s journey of starting as a processor to a multi-product AI based platform is helping African businesses break the shackles of limited outreach and complex legal procedures . It is uniting Africa as one.