US-Nigerian fintech company Flutterwave has created an e-commerce platform for African companies, becoming the latest start-up to see opportunities in the lockdowns that have been imposed as a result of the coronavirus.
Originally a payments processing business, Flutterwave CEO Olugbenga Agboola witnessed how the temporary lockdowns across the continent were disrupting businesses it worked with.
He also noted the impact on smaller shops, many of which were not yet operating online, along with the greater demand for e-commerce.
In response, Flutterwave devised an e-commerce platform to enable businesses to set up their shops online, with payments and delivery integrated.
Up to 90% of businesses in sub-Saharan Africa are small- and medium-sized enterprises, according to the International Finance Corporation.
Meanwhile, a study by data insight and market research firm Kantar, published Thursday, found that nearly three in five consumers in Nigeria planned to increase their online shopping in the future.
This represented the biggest increase of all of the countries in its survey, which polled 45,000 consumers globally.
Time to evaluate
Since its launch at the end of April, Flutterwave said that more than 1,000 businesses in Ghana, Nigeria, Kenya, and other countries in Africa, had created accounts on its e-commerce platform.
Agboola told CNBC that one of the biggest lessons he had learned from developing and launching a new part of the business while in lockdown was to “over communicate and be upfront with the team” about how the coronavirus pandemic had impacted the company.
While most businesses were experiencing negative effects from the pandemic, Agboola said it was also a great time to re-evaluate your strategy, get to know your product and fix what’s not working.
Flutterwave isn’t the only technology company tapping into the e-commerce boom during the pandemic and the wider growth of online shopping in Africa.
Jumia, which has been dubbed the “Amazon of Africa,” expanded and launched its platform in South Africa in April, selling essential products.
Although it came after a difficult year for the start-up – believed to be the first African tech start-up to be listed on the New York stock exchange – after it shuttered its business in three countries: Rwanda, Tanzania and Cameroon.
A technology ‘powerhouse’
Flutterwave’s expansion into e-commerce builds on its existing payments services business, facilitating global transactions in local currencies in Africa.
Sub-Saharan Africa is thought to be one of the world’s fastest-growing digital payments markets, with the largest population of underbanked and unbanked people in the world.
Flutterwave was established in 2016 by “a team of ex-bankers, entrepreneurs, engineers.” This included Agboola, whose background is as a software engineer working for the likes of Paypal. He took over as CEO from co-founder Iyinoluwa Aboyeji in 2018.
The fintech firm started out in San Francisco but after taking part in the prestigious start-up accelerator YCombinator set up its operational headquarters in Lagos, Nigeria.
Flutterwave says it is now worth over $200 million, having raised $35 million in its last fundraising round in January, when it also partnered with WorldPay and Visa.
Agboola argued that Africa is where China was 15 years ago.
He said the “building blocks requiring Africa to leap forward had already been built” in terms of payments, logistics and e-commerce technology, but they needed to come together to push the continent forward in terms of entrepreneurship.
“I think Africa is at the cusp … (of becoming) a real powerhouse for technology,” he added.
– CNBC’s Kate Rooney contributed to this article.