Fluuterwave in a strategic IPO move
This week, African payment unicorn, Flutterwave acquired its Payment Services Provider and Payment Facilitator licenses in Egypt, marking the formal launch of its operations in the North African region.
Below are three things you need to know about the strategic move.
1. Flutterwave is venturing into a very competitive market
The category of licence that Flutterwave acquired will enable the startup to act as an official payment service provider in the country, collect payments on behalf of its customers and settle payments locally and globally.
The licenses also allow Flutterwave to deploy a “Flutterwave for Business” suite of products including stores, payment links, invoices, and checkout for businesses in Egypt.
- Advertisement -
RELATED STORIES
- Flutterwave shuts down Barter virtual dollar card services, to terminate all cards by July 17
- Iyinoluwa Aboyeyi reveals he no longer owns any Flutterwave shares
- Moniepoint processed $100B worth of transactions in 2022
However, this automatically pits Flutterwave against Egypt’s top players including the IFC-backed Fawry, which processed over 2.5 million transactions per day in 2022.
The Egyptian payment ecosystem is well developed with 88% of Egyptians estimated to have adopted e-payment, according to a recent Mastercard report. This has created an attractive e-payment market that is coveted by some of the biggest players in the global payment space including Amazon Payment Service, Pay Mob, Opay, etc.
2. This is an expansion strategy ahead of IPO
It is no longer news that Flutterwave is paving a way for an Initial Public Offering, IPO. What is not clear yet is when exactly it would make the move. But it has been preparing for the historic moment since August 2022 when it first came to light through a Bloomberg report that the payment startup is preparing for an IPO on the Nasdaq Stock Exchange.
- Advertisement -
In addition, this plan saw it acquiring a key licence from the Central Bank of Nigeria in September and making a strategic hire in October 2022 by appointing Marshall Lux, a former Chief Risk Officer at JPMorgan Chase, as a senior advisor.
Meanwhile, many believe this latest expansion into Egypt is yet another milestone on the path to IPO.
Speaking on the expansion, Aalaa Gamal, Regional Manager, North Africa the licence “is the beginning of other strategic wins in the North Africa and Middle East regions”.
For Flutterwave founder and CEO Olugbenga GB Agboola, “Our vision is to connect all parts of Africa through payments and connect Africa to the world. This way, it is easier for multinationals expanding into Africa to do so. This achievement is yet another step in that direction.”
- Advertisement -
3. Flutterwave used the opportunity to pilot agency banking in Ethiopia
It is not so obvious yet what the strategic play is here, but as part of Flutterwave’s expansion initiatives, the company has also made it possible for users to send money to Ethiopia via cash pickup.
This means that Ethiopians in the diaspora can send money home and have the receivers pick up the cash in Dashen bank branches, Amole Agents, and Ethiopian postal service offices.
All these moves are a clear indication that Africa is definitely ripe for the picking with several innovative payment options and any ideas properly executed will definitely yield the desired outcome.