In the business environment, IPOs have emerged as a significant acronym that not many people can interpret. For the sake of clarity, I will first explain what an IPO is and then explain Flutterwave and the Africa situation. In an initial public offering (IPO), the founders of a firm give up a portion of their ownership in return for funding.
Before an IPO takes place, a firm, company, or business enterprise is owned by private individuals who may be the founders, directors, or managers.
When a business that is not publicly traded seeks to raise money by selling securities or shares to the general public, it announces an Initial Public Offering (IPO). In a simpler way, an IPO is the sale of securities to the general public on the primary market. As soon as a company is listed on a stock exchange, it becomes a publicly traded company and its shares are available for open market trading.
African companies are ready for IPOs
For the first time in 2017, 30 businesses in Africa offered their stock to the general public. A total of 920 million dollars in cash was obtained through initial public offerings by African businesses in 2021.
Liquid Telecom
Econet Wireless Zimbabwe reportedly discussed restructuring in 2018, according to Bloomberg. The discussions were about reorganisation, and it was probably about Liquid Telecom’s intentions to go public. eTelecom is a division of Econet that controls cross-border fiber networks in Africa totaling over 40,000 kilometers (25,000 miles).
However, it’s also plausible that the restructuring had anything to do with Cassava SmartTech, which went public in December. However, Nic Rudnick, the chief executive officer of Liquid, nevertheless, suggested that the firm may go public in 2017.
Oragroup SA
Oragroup SA, a Togolese lender, aimed to raise 100 million dollars, or 56.9 billion CFA francs. The regional exchange for West Africa was said to have experienced its largest initial public offering (IPO) with this. In order to acquire money to expand operations across 12 nations, Oragroup offered 20% of its equity in Abidjan, the capital of Ivory Coast, on the Bourse Regionale Des Valeurs Mobilieres. The bank will sell 7.8 million current shares at a price of 4,100 francs per share while issuing 6.1 million new shares.
Tingle
Tingo CEO Dozy Mmbuosi claims that Tingo is obtaining debt and equity finance through a private placement. Additionally, Mmbuosi stated that it is in discussions to list on the NYSE in the first half of 2022.
Tingo is a company that rents out smartphones to connect producers to resources like inputs, loans, and markets for their produce. Tingo was established more than 20 years ago. In addition, the business offers an e-commerce platform that, according to Bloomberg, has earned $4 billion in annual sales.
The company will “nearly double” the number of its agents to 50,000 thanks to a new relationship with Visa International, and it will work to make digital payments accessible to people in rural areas.
Flutterwave: how they started and grew
Across the African continent, Flutterwave, a Nigerian fintech business, offers a payment infrastructure for international retailers and payment service providers. The company, which has operations in Nigeria, Kenya, Ghana, South Africa, and seven other African nations, was created in 2016 by Iyinoluwa Aboyeji, Olugbenga Agboola, and Adeleke Adekoya. Its headquarters are in San Francisco, California.
Flutterwave processes millions of dollars’ worth of transactions each year and has recently been expanding across Africa. It is now integrated with important internet technologies like Shopify and WooCommerce and enables clients to make payments on websites like Amazon.
The Series D round of funding for Flutterwave brought in $250 million, tripling the company’s valuation to over $3 billion in just a year. The business, which has offices in San Francisco and Lagos, secured $170 million from Tiger Global and Avenir in a Series C round in March 2021, valuing it at $1 billion.
Olugbenga Agboola, the chief executive officer of Flutterwave, emphasised that the company’s success to date has been a result of perseverance and hard work, while stating that the support of clients, partners, banks, the general public, regulators, and most importantly, the people, has contributed significantly to this growth.
The upcoming Flutterwave IPO and its controversy
Flutterwave is the most valuable fintech company in Africa, Flutterwave, is rumored to be seeking an IPO in the US and Nigeria. Shares of Flutterwave would be listed in the IPO on the Nigerian Exchange as well as possibly the New York Stock Exchange.
Bloomberg was informed by sources with knowledge of the matter that the recent hiring at Flutterwave for key jobs was all done in anticipation of the IPO.
The anticipated IPO, however, might be postponed in light of the widespread bearishness experienced by global stock markets. In addition, since the beginning of 2022, Flutterwave has had to deal with a number of charges that could hurt its reputation as well as regulatory challenges. And the planned IPO is anticipated to be delayed due to the PR catastrophe this has caused.
According to people familiar with the situation who asked to remain anonymous because the information is confidential, the Nigerian financial technology business recently filled important jobs, including a chief financial officer, as it gears up for an IPO that may happen as early as next year. However, given the company’s reputational crisis and the current state of the global economy, they warned that it might take longer.
Regulator challenges have also been a problem for Flutterwave. A Kenyan high court blocked a few of Flutterwave’s bank accounts last month. According to a report by Business Insider Africa, the bank accounts contain a total of $52.5 million, money that the Kenyan agency believed to be the proceeds of fraud. However, Flutterwave vigorously refuted this accusation and labelled it a deliberate attempt to damage the company brand.
The company, which has offices in San Francisco and Lagos, will use the money to grow operations in its current markets and enter new ones in Africa. The executive and three other employees joined the business in June from American Express as Flutterwave works to strengthen corporate governance at a business that has been the target of financial misconduct claims.
Final Thoughts
For the majority of private businesses, making an initial public offering (IPO) is a significant achievement. But various businesses go public for various reasons. Small businesses typically
They seek to raise funds through an IPO in order to accelerate their growth.
Main photo: Flutterwave CEO Olugbenga Agboola
