Why We Invested: Flutterwave

When we first started HOF Capital back in 2015, one of our dreams was to help bring cutting-edge world-class technologies to the…

When we first started HOF Capital back in 2015, one of our dreams was to help bring cutting-edge world-class technologies to the 6 billion people living in emerging markets. In particular, as Egyptians, we always dreamt of bringing innovation to our home continent of Africa, a land of more than 1.3 billion people spread across 54 countries in an area larger than the US, Europe, and China combined. By doing so, we hoped to help bring prosperity to all Africans, more than 420 million of whom still live below the global poverty line.

One of the main problems that we identified early on was that Africa needed better digital payment infrastructure and technology. For example, even in the sprawling metropolis of Cairo where we grew up, home to more than 20 million residents, digital payment infrastructure and technology was so unreliable that we used cash to pay for almost everything, even for online purchases. Likewise, due to the lack of high-quality digital payment infrastructure and technology throughout the rest of Africa, most African businesses and consumers were still using cash to make all of their payments.

So when we first learned about African digital payment startup Flutterwave in 2016, we immediately became excited because the company had developed a brilliant solution to this problem — a world-class, easy-to-use, pan-African digital payment platform that supported 150+ currencies and aggregated dozens of different payment methods used throughout the continent, all accessible through a single API. Unlike the leading incumbent solutions in the market, the product was also easy and free to set up and exceptionally reliable with military-grade security. In fact, the experience of using Flutterwave felt as smooth and secure as the digital payment solutions like Stripe and Venmo that we had grown accustomed to using since moving to the US, which was unprecedented for the region. This was a first-of-its-kind product that primarily serviced Nigeria in 2016 (when HOF first invested in the company), but that we had conviction would eventually revolutionize the way that digital payments would be made throughout all of Africa, enabling everyone in Africa to transact seamlessly across the entire continent and around the world.

Moreover, after spending time with GB and the company’s other co-founders, we discovered that they were visionaries who shared our dream of bringing prosperity to all Africans. Furthermore, they were uniquely well-positioned to turn this dream into reality; GB had previously led digital banking and innovation at some of Africa’s largest banks (Access Bank, Standard Bank, etc.), and all 3 co-founders had led successful African startups with international client bases. Along the way, they had developed new payment technologies, helped write payment regulation in Nigeria (Africa’s most populous country), and dealt firsthand with the challenges of using and providing digital payment solutions in the region. Hence, it was an easy decision for us to invest in their seed round and every round since.

Since being founded just 4 years ago, Flutterwave’s products have already enabled more than 86,000 merchants (most of them small business owners, but also global enterprises like Booking.com, Uber, and TransferWise) and more than 100,000 individuals in Africa to make and receive various types of payments. The company’s impact on the African economy has been substantial, having already processed more than $5.4 billion of total payment volume across more than 107 million transactions in 10 countries in just 4 short years. Moreover, countless other African fintech companies have integrated their products with Flutterwave or built upon Flutterwave’s APIs, solidifying Flutterwave’s position as one of the infrastructural cornerstones for fintech in the region. In fact, many of the world’s largest payment companies, including Visa, Mastercard, Alipay, and FIS (Worldpay), have already recognized Flutterwave’s integral position in the African payment landscape and have chosen Flutterwave as one of their primary partners and gateways into the continent. As eloquently summarized by Visa’s former chairman and CEO, Joe Saunders, who now sits on Flutterwave’s board: “GB and his colleagues have not only identified, but continue to successfully and thoughtfully execute upon, a once-in-a-generation opportunity in commerce and payments for the emerging markets of Africa.”

Flutterwave is still early in its journey, and we think the best is yet to come. The company achieved 500%+ year-over-year revenue growth in 2019 and recently raised a $35M Series B round (with participation from Visa and FIS) in order to fuel expansion across Francophone and North Africa, which has given us a great opportunity to deepen our partnership with the Flutterwave by helping them hire top talent, build channel partnerships, work with regulatory leaders and set up operations in Egypt. What gets us most excited about the road ahead for Flutterwave?

  1. Flutterwave continuing to launch new innovative products and features that make life substantially better for all Africans, such as Barter for consumers, invoices for professionals, and instant settlement for merchants.

  2. Flutterwave ultimately: (1) expanding into every country in Africa, (2) integrating with all of the different digital payment methods in each country, and (3) enabling a truly connected pan-African digital payment system.

  3. Flutterwave ultimately integrating with all of the major digital payment platforms around the world, enabling African businesses and consumers to seamlessly transact with anyone anywhere.

There’s no doubt in our minds that Flutterwave will soon become one of the most important tech companies in all of Africa. The ability to seamlessly make and receive digital payments is becoming increasingly important for the success and prosperity of all individuals and businesses, from global tech companies like Uber to local mom-and-pop shops, and Flutterwave is well-positioned to become the most complete solution on the continent. We’re excited to be on this journey with them.

— Hisham Elhaddad, Onsi Sawiris, and Fady Yacoub