Africa-focused FinTech startup Flutterwave has reportedly sold an equity stake to blockchain company Ripple.
This investment lifts Flutterwave’s valuation to $3.3 billion, CEO Olugbenga Agboola said in an interview with Bloomberg News published Tuesday (June 16). The news outlet added that Agboola declined to reveal how much Ripple invested or the size of its share.
“We are getting capital as they have invested cash in us,” and greater access to payment infrastructure across Africa, Agboola said.
He added that Ripple’s interest in his company comes from a joint goal of “moving money quicker and better.” While other companies are “participating at commercial level, they’re participating at the equity level, which means obviously they get to participate on the upside,” Agboola told Bloomberg.
The report noted that this deal is a sign of shared strategy between the companies amid growing demand for faster and cheaper cross-border transactions in Africa, giving Ripple access to one of Africa’s largest FinTech networks while offering Flutterwave added infrastructure and expertise to expand its traditional and blockchain-based payment services.
Ripple has been expanding on the continent through collaborations with Absa Bank in South Africa and payments provider Chipper Cash, Bloomberg added. Flutterwave, operating in 35 African countries, has been beefing up its digital assets operations. Last year, it debuted stablecoin-based payment services to let businesses and consumers transact and hold dollar-pegged tokens.
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The news came the same day as the International Monetary Fund issued a report detailing the popularity of cross-border stablecoin payments in Flutterwave’s home country of Nigeria. The IMF report found that Nigeria accounts for 60% of stablecoin inflows in Africa since 2019.
“What began as a niche technology has become a meaningful cross-border payments channel. Its rapid growth is easing long-standing frictions in cross-border transactions,” the report said. “It is also testing the limits of existing monetary and regulatory frameworks.”
The IMF argued that stablecoins allow anyone with a smartphone and internet access to receive remittances or make cross-border payments within minutes, giving people and businesses with limited access to traditional banking channels an alternative way to make payments.
But the same features that make stablecoins useful—faster payments and remittances, greater financial inclusion—also come with “policy tradeoffs,” the report added.
“One is monetary sovereignty,” the IMF wrote. “As stablecoins are typically denominated in U.S. dollars, widespread use can resemble a digital form of dollarization. By reducing demand for the local currency, it could weaken the transmission of domestic monetary policy.”
