Flutterwave UK Limited, the British subsidiary of the African payments giant has quietly built a profitable business abroad.
However, its UK turnover appears relatively modest, suggesting a potential emphasis on non-UK markets like Nigeria or non-UK-specific service lines like its enterprise offering. In October 2023, the fintech said its enterprise business was its biggest revenue driver while retail products had little contribution to revenues.
The UK entity was incorporated in February 2017 with three directors—Iyinoluwa Aboyeji (its first CEO), Olugbenga Agboola (then CTO), and Adeleke Adekoya (chief compliance officer). Over time, other directors have been named like Stella Nneka Obi-Okoji and Mobolaji Bammeke. Notably, the company’s first significant financial activity was recorded in 2021.
The inactivity in the UK coincided with an era of investor bullishness and scandals. Flutterwave announced a $19.2 million Series A and $35 million Series B between July 2017 and January 2020. Internally, the company was battling harassment allegations and administrative errors from late 2018 till 2019.
During that period, the company’s earliest directors— Aboyeji, Adekoya, and Stella Nneka Obi-Okoji resigned leaving Mobolaji Bammeke, Flutterwave’s Global Compliance Officer and Agboola as directors.
Flutterwave UK’s cash position grew nearly tenfold during the coronavirus pandemic, increasing from £37,531 (₦15 million) in 2019 to £317,599 (₦165 million) by the end of the crisis.
2021: Flutterwave becomes a Unicorn
2021 was Flutterwave’s breakout year both home and abroad. A $170 million cash injection from Tiger Global and Avenir Growth capital made the company a unicorn. It was also the first time the UK subsidiary began to reflect significant financial activity.
The UK subsidiary’s turnover was £934,354 (₦520 million), primarily due to a business support service agreement with the parent company. Business support agreements are common amongst Groups with multiple entities.
By maximising each subsidiary's strength, the company gains a strategic advantage. For instance, the UK entity could have provided specific services like sponsorship and hiring of key global talent services for the Group. In return, the parent company pays the subsidiary. By setting a Transfer Price between the UK and the parent company (US), the group can save on taxes.
In 2021, the UK company also made a £47,456 (₦26 million) profit. Its employee count grew to four as the subsidiary gained a cash position of £605,218 (₦337 million).
The following year, the number of UK employees rose to 13 and Flutterwave reached a $3 billion valuation following its Series D raise of $250 million.
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Founder and CEO, Agboola's shareholding in the UK subsidiary increased, as he now holds 75% of shares and voting rights in the company. A fintech expert familiar with the company's structure downplayed the significance of the consolidated shareholding. They explained that this subsidiary primarily exists to hold necessary licenses and does not represent the parent company where other shareholders would typically be reflected.
Majority control grants Agboola the right to appoint or remove a majority of the board of directors in the UK division.
2023: The best year yet for Flutterwave UK
2023 was Flutterwave UK's best year, based on filings obtained by Condia. The company's success coincides with the re-launch of Send, its remittance app. The UK subsidiary's turnover grew by 42% to £5.4 million (₦6 billion) from £3.8 million (₦2.08 billion) in 2022.
Cost also increased as Administrative expenses rose by 16.67% to £4.2 million (₦4.84 billion) from £3.6 million (₦1.97 billion). The increase in admin expenses is likely due to the headcount growth, as nine more employees were added to the company in that year.
The subsidiary recorded a 13.58% profit growth from £427,407 (₦231 million) to £485,456 (₦559 million). But cash at hand and in the bank declined by 39% to £14 million (₦17 billion) from £23 million (₦12 billion).
This full-year report coincided with when the parent company repositioned its business to focus on remittance and enterprise verticals, its two biggest revenue drivers. That restructure saw the Group shed 3% of its workforce.
While the 2024 financials are yet to be released, Flutterwave UK's growth trajectory is crucial for the parent company's future, particularly as it explores potential IPO options. Despite the controversies surrounding its core operations, the subsidiary's performance underscores the company's ability to expand internationally.
Flutterwave UK has full control over several subsidiaries including E-Wallet Africa, a Tanzanian software firm; Netinfo Plc: a Cypriot software company; and AlexPay Africa, a Ghanaian fintech company. The company also held stakes in Ozow Proprietary Limited, a South African payment company and Paymob Technology Limited, a payment licensing institution. Flutterwave UK seized control of the now-shuttered Disha in 2022, filings said.
The exchange rate varies yearly, so these are the rates we used in this article:
- 2019: £1/₦405.970
- 2020: £1/₦521.139
- 2021: £1/₦557.368
- 2022: £1/₦541.98
- 2023: £1/₦1,152.85
