Ideas & Debate

Much-coveted unicorns need governance too


If you have children under 10 years old you’re likely to be familiar with the mythical animal called unicorn, a horse with a single straight horn projecting from its forehead.

Due to its mythical nature, the word is also a euphemism for something that is highly desirable but difficult to obtain, like driving on either Kiambu Road or Langata Road at 7 a.m. on a weekday morning in February and finding zero traffic.

That would be a unicorn event. In the financial arena, a unicorn is a startup company that is privately owned and is valued at over $1 billion. Examples of such companies that are familiar to this part of the world would be AirBnB and Google before it went public.

But we do have our very own African unicorn. Flutterwave is a Nigerian tech company founded in 2016 by Iyinoluwa Aboyeji, Olugbenga Agboola and Adeleke Adekoya.

Although headquartered in San Francisco, its payment infrastructure operations for global merchants are in over 10 African countries, including Nigeria, Kenya and South Africa.

In 2021, after receiving a Series C private equity investment amounting to $170 million — the first African tech startup to receive such an amount— it achieved the highly coveted unicorn status as it was valued at over $1 billion.

Lately, though, the company has been in the news for all the wrong reasons, breathlessly articulated in a highly detailed investigative piece by Nigerian journalist David Hundeyin published in the West African Weekly on April 12, 2022.

In the article, Hundeyin exposes how one of the founders allegedly started up the business while still employed by a large Nigerian bank that was also doing payments business with the company, a not-so-subtle hint at early stage conflict of interest.

Agboola was the head of digital factory and innovation at Access Bank before moving full-time into Flutterwave. It goes further to expose how Agboola allegedly allocated more shares to himself as the company’s stature increased.

This allegation was corroborated by Aboyeji, one of the other co-founders and initial CEO thus, “When I joined the company, I was told there’s a chief technology officer named Greg, who’s from MIT, whom I’d meet someday. It never happened” in an interview with online magazine Tech Cabal.

“After a while, it became clear what had happened. By that time it didn’t matter. We [Aboyeji and third co-founder Adeleke Adekoya] had already signed agreements and I decided to just move on,” Aboyeji concludes.

Essentially Aboyeji describes how Agboola gained more shares at the expense of the other two founders as the company hurtled towards more private equity financing, which would see any sale of shares transform the founder shareholder into a dollar millionaire.

There are also grave accusations against Agboola of alleged sexual harassment of female employees in the firm.

Is there a board of directors at Flutterwave. Yes. It is made up of four board members and one board observer. All male, by the way.

The company successfully raised a $250 million Series D round of financing in February this year, increasing its valuation to $3 billion, and therefore should ideally have a full set of competent non-executive directors providing oversight, insight and foresight on the company’s operations.

You want to imagine that an emergency board meeting has been called to deal with this enormous reputational risk to the firm. But it cannot be easy for a board to discuss the conduct of a founder, the individual who is the vision bearer as it were and who has the networks and social capital to keep the business growing.

Can such a person be replaced? This is a question probably dancing in the frontal cortex lobe of the board members, waiting for the brave board member who will voice it out loud.

But surely these are just allegations and a person is innocent until proved guilty is another mental equation playing out. Truth is, such allegations rarely find their way into a court of law and are prosecuted in the court of public opinion.

But a discussion, however untidy and unpleasant, must be had by the board and a high-level communication sent out to all key stakeholders being employees, investors and clients letting them know that these allegations are being given due regard at the highest level.

As of last week, the only communication in the public domain was an email from Agboola to employees denying some of the allegations and completely ignoring the others.

So has the board decided to rally around their “boy” and let this storm pass, or will they show some leadership and tackle the messy allegations? Time will tell.

[email protected] Twitter: @carolmusyoka