Last month, Flutterwave, Africa’s most valuable startup, appointed Mitesh Popat as its new chief financial officer. The company, valued at $3 billion when it raised a Series D in 2022, appointed Popat after the resignation of Oneal Bhambani, who stepped down ten months ago for personal reasons.
Bhambani joined Flutterwave in mid-2022, during a turbulent time when the fintech faced allegations of employee mistreatment and financial misconduct. During his 18 months with the company, he played a key role in stabilizing operations. One notable achievement was clearing a money-laundering case in Kenya, where authorities had frozen over $50 million of Flutterwave’s funds. The ex-American Express executive also co-led the fintech’s expansion into Rwanda as a licensed remittance provider and kickstarted its application for a license in Kenya. Under his watch, Flutterwave laid plans to invest $50 million to strengthen its presence in Kenya, South Africa, Nigeria, Rwanda, Tanzania, and Cameroon.
Surely, Flutterwave’s expansion plans and next growth phase will partly be Popat’s responsibility. Again, while Bhambani’s departure and the exits of other ex-Kabbage executives reignited concerns about Flutterwave’s leadership and IPO plans, Popat’s arrival, along with the hiring of six additional executives in finance, risk, legal, and compliance, could help put those concerns to rest and turn the company’s narrative around.
“Mitesh brings the right balance of global and emerging markets experience as we optimize for sustainable growth,” said CEO Olugbenga Agboola to TechCrunch. “Our recently acquired licenses in Malawi, Uganda, Ghana, and Mozambique, as well as our expansion to 49 states in the U.S., will further extend our solutions of bridging the gap between Africa and the global economy.”
Meanwhile, Flutterwave recently undertook its first major restructuring since its founding in 2016, when it laid off 3% of its workforce in June. It also shut down Barter, its consumer finance app, which allowed users to send and receive money and pay bills; the reason is that it wants to focus on its core products: enterprise solutions and remittances.
The flagship enterprise product, Flutterwave For Business (FFB), which banks, startups, and companies in e-commerce, transportation, and FMCG use to accept payments, generates 90% of the fintech’s revenue. Its remittance product, Send App, which facilitates international transfers for users across Africa, Europe, the U.S., and Canada, makes up the remaining 10%.
Agboola believes the focus will help Flutterwave cement its position as the category leader in Africa’s payment infrastructure across several metrics: licenses, reach, payment types, customer base, and revenue, although he did not disclose specific revenue figures during our conversation. He expressed a clear ambition for Flutterwave: “We want to be that infrastructure layer that powers all the who’s who of payments on the continent; I’d say we want to be the Adyen of Africa.”
My conversation with Agboola further illuminates what these recent changes and developments mean for Flutterwave and how the fintech is addressing challenges like fraud that emerge alongside its rapid growth.
The interview has been edited for length and clarity.
You said Flutterwave wants to be the Ayden of Africa. I agree that in terms of reach there are some similarities: Adyen is in over 100 countries globally while Flutterwave is in 30 across Africa. But unlike Ayden, Flutterwave still relies on partnership banking licenses. Does the recent acquiring of its own licenses in certain markets mean Flutterwave wants to change this?
There are many ways to launch a fintech infrastructure business. You can launch in partnership with banks, which have all the infrastructure you can layer to start a fintech once you and the banks are aligned. But to go deeper into the stack, you have to ensure that you eliminate as many third-party layers as possible and ensure you are the direct owner of your infrastructure. This will allow you to give your customers more value.
We cannot afford third-party downtime, so we need to hold our licenses. However, it depends on the market. Some markets are obviously more priority for our customers than others, but our goal is any market that is top-of-mind for our top customers, we have to hold our license in those markets. It’s a play at providing better customer experience and being that reliable payment infrastructure is so crucial for us, and that’s how we want to scale that business.
What would you say are key markets for Flutterwave right now?
Our core key markets in Africa are Egypt, Morocco in North Africa; Nigeria and Ghana in West Africa; Rwanda, Tanzania, Uganda, and Kenya in the East Africa corridor. Then you look at Central Africa, that’s Cameroon, Senegal, Cote d’Ivoire and DR Congo.
I understand that these markets are crucial for Flutterwave’s enterprise business and, to some degree, its remittance product. In June, you reduced your workforce by 3% to concentrate on these two segments and deprioritize Barter which was popular with consumers. Can you explain the reasoning behind that decision?
Barter was sunsetted because our focus shifted toward where the majority of our customers were. One thing we do very well at the company is follow our customer journey, and our customer voices, mostly those of businesses, are important. We heard them saying, “Look, we want to make more enterprise payments,” and retail consumers were more concerned about sending money from Nigeria to another country or receiving money from the US to Nigeria, Ghana, Uganda, or Rwanda. We listened to our customers and decided to align with their wants.
What about the agency banking business where Flutterwave provides POS terminals for businesses to accept offline payments? Is that still operational?
Flutterwave has always been an omni-channel company, meaning that we provide service for our customers through the channels where they want to be served. Case in point, some businesses in Lagos, Nigeria, have our POS devices. We serve them both online and in-store. However, we are very big on customer experiences; that’s why you see our POS devices with high-value merchants and wouldn’t see us everywhere across the country deliberately. But that’s our strategy: to ensure we serve businesses omnichannel digitally, then we go in-store if required.
How many merchants are using Flutterwave omnichannel payment gateways?
We’ve got over 1 million businesses signed up on our platform today.
I understand Flutterwave’s revenue split between enterprise and remittance is currently 9 to 1. Given the exponential growth of remittances to Africa, which reached $100 billion in 2022, do you anticipate this split will change significantly in the coming years?
Interestingly, I was looking at Square numbers recently, and Cash App is now bigger than Square business by revenue, which says a lot. However, I don’t see that happening here, as our enterprise will keep growing. That’s where our bet is, and I don’t see that changing much. Remittance will keep growing, too, for us. We got 13 money transmission licenses in the U.S. last December, which we’ve seen doubled to cover the entire U.S. with our remittance product. However, we’re yet to scratch the surface when it comes to payment and enterprise infrastructure in Africa.
Is Flutterwave currently working on new products outside enterprise and remittance?
Most of the category leaders on the continent are our customers. So yes, we’re continuosly building and investing in sectors where our customers are such as entertainment, hospitality, transport and travel, and TMT. Our focus is on investing in R&D and constantly building features to help them grow and scale because, obviously, their growth is ours.
I’m eager to see what new products Flutterwave rolls out in the next couple of years. Looking at the bigger picture, the fintech has been strategic in its recent hiring. Over the past year, most of your executives have come from Stripe, Cash App, PayPal, and Western Union, with Mitesh Popat from Citi as the latest addition. One could argue that this lineup is poised to take Flutterwave public soon.
We’re arguably the biggest African fintech right now by any metric, and we want to cement that. Every company will look for ways to get more capital as required through private or public capital, but that’s not our current priority. The company wants to invest in continuous market penetration. We want to go deeper than wider as we double down on our key business segments of enterprise payments and remittances.
We want to be better in every segment for our customers because we want them to keep scaling with our platform; these are my current corporate priorities, including scaling risk management and investing in high-performing talent.
That’s not the only thing Flutterwave has been in the news for over the past year. Local reports have it that fintech is working to recover several million of dollars in diverted funds resulting from three different security breaches. What’s being done to prevent further occurrences?
As a financial infrastructure, things like that will happen from time to time—not that we want them to, but obviously, because two things are involved there. We have customers, and we constantly try to inform them about how they need to protect their infrastructure keys. If a merchant API key is compromised, we have no control over that. What we do on our end is constantly scale our infrastructure in a way that allows our merchants to keep protecting themselves as we scale.
When this happens, we have a fiduciary responsibility to help our customers recover money they lost by involving the law or police. Events like this reinforce the need for responsible journalism so the public isn’t misled to think Flutterwave was hacked because of a court order to block certain accounts when that wasn’t the case. We’re just carrying out our responsibility.
Obviously, fraud is best combated at the industry level, and we’re helping the ecosystem by collaborating with other fintechs and banks using NIBBS (Nigeria’s national switch) and the EFCC (law enforcement and crime agency) to fight cybercrime. We invested in a plan with EFCC to build a cyber security research center where, as a partner, we provide resources, support, and advisory and share trends and information on the current state of fintech in the country with the agency. That’s how we’re playing a part in helping mitigate the prevalence of fraud within our collective networks.