Flutterwave Stumbles as Misconduct and Fraud Allegations Stack Up
As Africa’s most valuable startup, Flutterwave stands as a beacon of hope and a promise of great things to come. Even its mission, to provide businesses with endless possibilities, is designed to help those with ambition achieve their dreams. But no matter how effective its payment tools have proven, the company has hit a stumbling block in the face of scandals and opposition.
Just this year, the company saw its valuation rise, exceeding $3 billion and placing itself and founder Olugbenga Agboola in the limelight. But in April, allegations of misconduct rained down on the founder and CEO.
The allegations include creating a fake co-founder to allocate more shares to himself in the company’s early days and cheating employees who sold their shares, offering prices below the valuation. Additionally, he failed to disclose that he was working on Flutterwave while employed by Access Bank, his previous employer, using the resources given to him for his project.
There have even been accusations of harassment and bullying within the company, including suggestion of Agboola having sexual relationships with subordinates. Former employees at the company even went as far as to say a culture of harassment and bullying was created under Agboola’s leadership.
The company has also faced scrutiny of past issues, including an ethics investigation in 2018 by the US Securities and Exchange Commission. While the SEC did not comment on the issue, former Flutterwave co-founder Iyinoluwa Aboyeji confirmed the supposed investigation.
All of the accusations led to many being afraid of what would happen should investors be spooked away from African startups. But that was not the end of the company’s troubles.
Earlier this year, a Kenyan court froze more than $40 million in accounts under Flutterwave. The reasons for the action came from alleged money laundering and fraud, with the company being placed at the center of a Kenyan investigation.
Kenya’s Assets Recovery Agency (ARA) launched investigations into many transactions and froze dozens of accounts linked to Flutterwave under suspicion of money laundering. In total, the investigation uncovered over $200 million in suspicious funds associated with the company.
Flutterwave has denied the allegations of money laundering and mentioned having the records to prove it, but the many scandals have hurt the company. That includes damaging Agboola’s position.
In an attempt to stabilize, Flutterwave started overhauling its leadership team. The changes include a new chief financial officer (CFO), Oneal Bhambani, and a new chief technology officer (CTO), Gurbhej Dhillon.
However, the charges in Kenya run deep, so it is unknown how things will shake out. That is especially so since Flutterwave was struggling to obtain a payments license from the Central Bank of Kenya. The regulator even directed all financial institutions to cease doing business with Flutterwave in July.
But despite the troubles it is facing, Flutterwave continues to move forward. The company is launching its own investigation and looking toward the future and its potential initial public offering in 12 to 18 months. It even announced a staff size increase of 200 through its inaugural Graduate Trainee Program. Whether that will be enough is yet to be seen. Trust is everything in finance, and Flutterwave might very well have lost too much to recover.
Spencer Hulse is a news desk editor at Grit Daily News. He covers startups, affiliate, viral, and marketing news.