Flutterwave, Africa’s most valuable fintech company, is in the process of acquiring a bank in East Africa, Chief Executive and co-founder Olugbenga Agboola said, as the Nigerian payments company accelerates its expansion into banking services.
“We are currently acquiring another bank, in another country,” Agboola said. He did not disclose the identity of the target institution or the country involved, stating only that the acquisition is taking place in East Africa.
The transaction has not yet been completed. The planned deal follows Flutterwave’s acquisition strategy launched earlier this year.
In January, the company acquired Nigerian fintech Mono, which specializes in financial connectivity services. That acquisition helped Flutterwave secure a microfinance banking license from the Central Bank of Nigeria on April 2.
Moving From Payments to Deposits
Until now, Flutterwave has processed customer payments without holding customer deposits. The company has relied on partner banks to provide bank accounts, issue payment cards and settle merchant transactions because only licensed banks can access Nigeria’s national payment system.
Those partnerships required Flutterwave to share part of its revenue with banking partners. A banking license allows the company to retain customer deposits and capture those margins internally.
“$40 billion has passed through our platform, and we have not retained a single cent,” Agboola said, adding that Flutterwave aims to achieve profitability this year. He said acquiring an existing bank, rather than establishing one from scratch, also provides immediate access to a banking license, an existing customer base and an operational branch network.
Fintechs and Banks Pursue Similar Strategies
Flutterwave is not alone in pursuing banking acquisitions. Paystack, owned by Stripe, acquired Nigerian microfinance bank Ladder in January. Meanwhile, Moniepoint completed the acquisition of Kenya’s Sumac in March. Conversely, established lenders including Access Bank, KCB Group, and South Africa’s FirstRand have expanded by acquiring fintech companies.
Agboola identified Kenya, Ghana, Rwanda, Tanzania, South Africa, and Egypt as Flutterwave’s priority markets, with expansion into the Democratic Republic of the Congo and Ethiopia planned at a later stage. He said Flutterwave will enter markets through acquisitions, banking licenses or partnerships depending on local regulatory conditions.
However, one uncertainty remains. Flutterwave currently holds a microfinance banking license in Nigeria, which permits fewer activities and lower transaction limits than a full commercial banking license.
Agboola did not disclose whether the East African acquisition involves a microfinance bank or a commercial lender.
Nigeria Listing Could Precede Global IPO
Agboola also signaled a potential shift in Flutterwave’s long-awaited listing strategy. Asked about the company’s initial public offering, he said the process would begin in Nigeria. His comments marked a departure from previous indications that Nasdaq would serve as the company’s primary listing venue.
He did not specify whether Flutterwave is considering a primary listing in Lagos, a dual listing, or another structure. His remarks come after a record year for the Nigerian Exchange, where financial stocks have reached record valuations.
Agboola also outlined his long-term ambition for the company.
“In ten years, Flutterwave will either be the JPMorgan of Africa or be acquired by one.”
This article was initially published in French by Fiacre E. Kakpo
Adapted in English by Ange J. A de Berry Quenum
By EcofinAgency
