Payments company Flutterwave has become the fourth African startup to reach “unicorn” status.
The Nigeria-founded startup has reached a valuation of over $1bn after raising $170m in a Series C round, it was announced on Wednesday.
The round, which was led by growth-equity firms Avenir and Tiger Global, brings the total investment in Flutterwave to $225m.
Flutterwave joins only three African startups to have reached the elusive $1bn valuation – Egyptian payments company Fawry, Nigerian payments company Interswitch and Dubai-based e-commerce giant Jumia.
Olugbenga Agboola, CEO and founder, tells African Business that Flutterwave will use the capital to acquire more users, expand into new markets and build an app.
The company will soon set up shop in more francophone and North African markets including Egypt, Tunisia and Morocco, he says.
The San Francisco-based firm, which was founded in 2016, is aiming to be the go-to provider for businesses that want to transact within Africa and with trading partners like China, Europe and North America.
It is already one of the continent’s largest payments companies with infrastructure that reaches over 33 African countries including Nigeria, Kenya and South Africa.
The startup has processed over 140m transactions worth over $9bn to date and serves more than 290,000 businesses including customers like Uber, Flywire, Booking.com and Facebook.
Like most payments companies across Africa, Flutterwave has benefited from the shift to digital payments over the Covid-19 period.
“Covid-19 played a big part in our growth because we were able to quickly onboard more customers,” says Agboola.
“People that might not have said yes to online payments have now said yes because of the pandemic.”
Growth during Covid-19 added to a revenue increase of 226% from 2018 to 2020.
One possible barrier to growth could be national regulators and brick and mortar banks moving into the space.
The Bank of Tanzania is currently building an interoperable payment system known as Tanzania Instant Payments System (TIPS) which allows the transfer of payments between different digital financial service providers (DFSPs), including both banks and non-banks such as e-money issuers.
However, Agboola remains confident that there is still “plenty of space to grow”.