Flutterwave, which managed to raise $100 million in January 2021, provided a compelling set of metrics to investors. Its revenue slowed from $5 million to $55 million between 2018 and 2020. Gross profit was $26 million with a 48 percent margin. Its services were used in 20 countries, owing to the hard work of over 270 employees.
According to Quartz's investor observations, the company acquired licenses in six African countries and plans to introduce new products, the company projected a gross profit of about half a billion dollars by 2025.
Tiger Global and other investors were on the verge of a billion dollars for the first time in Mar. 2021. Flutterwave has and is today valued at over $3 billion, becoming Africa's most valuable and talked about technology business.
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With remarks this month less heuristic due to Olugbenga Agboola, attention on Flutterwave and African startups is less focused on sugar rush valuations. For the first time in African technology, the dominant thread between investors is on corporate governance, ethics, and culture.
According to Quartz, the market requires a wake-up call. Eghosa Omoigui, the founder and managing general partner of EchoVC, has told Quartz.
"Every ecosystem goes through this, but we must be aware when behaviors begin to corrosive. "Members, culture, integrity, ethics, and team building are all components of great companies and founders."
Some of the allegations against Flutterwave are still to be substantiated. Negative conclusions about the company's future would be premature. Yet, the existence of some evidence and reports of at other locations "pose a real risk of putting a pall on the prospect set."
Rebecca Enonchong, founder of AppsTech and startup investor, believes a fix is required at Flutterwave. "Even if just parts are true, the only way to go is to change management and governance," she said.
What is the board of directors of Flutterwave?
Omoigui and Enonchong say the company's board of directors will have to to make those changes, as well as two previous Flutterwave investors who have departed the business as a result.
Omoigui believes the board should hire a third party to verify what portions of the allegations are genuine, and to establish where ethical lines were crossed or unlawfulities committed. How they respond to that will be crucial, he adds.
So far, it is unclear how they are responding. One person familiar with the company's internal procedures said Agboola maintains the board's confidence. It's probable that some of his statements were already known and discussed before this week, according to the person.
"They know more than we do," Enonchong says in his response. "Perhaps the board also needs some shake-up if everything happens under their watch."
If the alleged issues have been corrected, standing by Agboola might be acceptable, and it would be helpful to know what corrections are, according to Enonchong. A public statement by the board may be required to reinforce their trust in Agboola, she says.
The question whether and when the next version of such a statement will be announced remains to be seen. Flutterwave has yet to respond to two Quartz requests for clarification.
Agboola's alleged actions should not encase Flutterwave itself, according to former Flutterwave investors, although they believe the allegations will not affect Flutterwave because the company is already a vital component of Africa's digital economy.
I believe in the end that Flutterwave is a valuable business. They will likely need to make some management modifications and improve governance, but it is still a unicorn, Enonchong said.