Talking Banking Matters

Leapfrogging a generation:
Talking with GB Agboola,
CEO of Flutterwave
The cofounder of the Lagos-based fintech shares his perspectives
on the nuanced dynamics of payments competition and innovation in
Africa.

April 2022
 Matt Cooke, McKinsey: From McKinsey’s
Banking & Securities Practice, I’m Matt Cooke,
and this is Talking Banking Matters—new,
short audio content for leaders in banking,
securities, and beyond. For this episode, our
New York–based senior partner emeritus Vijay
D’Silva, together with Topsy Kola-Oyeneyin, a
McKinsey partner based in Lagos, and Edem
Seshie, associate partner also based in Lagos,
spoke to Olugbenga Agboola, better known
as GB, chief executive and cofounder of the
payments solution company Flutterwave.
Here’s Vijay to tell you more.
Vijay D’Silva: Africa might be one of the
hottest areas in payments these days.
Domestic electronic-payments volumes,
including wallet-enabled payments, more than
tripled between 2015 and 2020, and they are
likely to increase fivefold by 2025, hitting over
150 billion transactions. Banks, telcos, and new
fintechs are all competing to serve a growing
middle class while also enabling financial
inclusion on the continent.
The capital markets have started to notice.
According to TechCrunch, 2021 was a record
year for venture funding into African start-ups,
with over $4 billion raised. That was double the
previous high of $2 billion in 2019. Most of that
funding went to four countries—Nigeria, South
Africa, Egypt, and Kenya—and into fintechs. In
2021 alone, there were five fintech unicorns
created in Africa, more than the previous years
combined.
One of those firms is Flutterwave, a fast-
growing fintech based in Lagos that is looking
to provide the payments infrastructure
to support businesses, merchants, and
consumers across Africa. After its most recent
funding round of $250 million, it reached a
$3 billion valuation.
My guest today is Olugbenga Agboola,
better known as GB. He is Flutterwave’s
CEO, having cofounded Flutterwave in 2016
along with Iyinoluwa Aboyeji. Joining us for
the conversation are Topsy Kola-Oyeneyin,
a McKinsey partner based in Lagos, and
2 Leapfrogging a generation: Talking with GB Agboola, CEO of Flutterwave
associate partner Edem Seshie, also based in
Lagos.
It’s easy to see why entrepreneurs like GB
are excited about the potential in Africa. It’s a
continent of 1.3 billion people with a combined
GDP of $2.4 trillion concentrated in a few
countries like Nigeria, South Africa, Egypt, and
Morocco. At the same time, Africa is urbanizing
quickly, and the population in cities is expected
to triple over the next 30 years. But banking
infrastructure has lagged that of more
developed markets. According to the World
Bank, only 40 percent of African adults have
bank accounts, versus almost 95 percent in
North America and the EU. While this creates
a challenge for African governments, it also
creates opportunities for entrepreneurs.
Here’s GB.
Olugbenga “GB” Agboola: There are so many
problems to solve on the continent. There
are so many things to build. I’m excited by
entrepreneurs who are willing to take on these
crazy problems and try to solve them, across
the board. Africa has always been known to
leapfrog. We go from nothing to something,
consistently—no phones, to mobiles, to
internet. People skipped browsers; they search
for what they want to buy on Instagram.
We’ve always been that way when it comes to
[technology] leapfrogging a generation. That’s
already happening here [with payments] as
well. A lot of the unicorns you see in Africa are
solving real problems. From OPay to Chipper
Cash to Interswitch, if you live in Africa, you will
see firsthand how these guys are relevant and
are actually solving problems. And they hope to
do so at a huge scale, which is amazing.
So I think it’s a great time to be here. The
market is still huge and still largely untapped.
There is still a huge population that are not
even banked at all on the continent. It’s just
the place to be in the next ten to 20 years.
It’s going to be explosive. Our goal is to be
here and stay alive to be able to harness the
opportunity.
Vijay D’Silva: This opportunity has not gone
unnoticed, and Topsy, Edem, and others in Lagos
are monitoring the situation closely.
Topsy Kola-Oyeneyin: I think it’s going to be
very interesting to see how the landscape
evolves, because there are a lot of exciting
things happening. Venture funding is increasing,
banks are carving out their payment subsidiaries,
and fintechs keep developing new, innovative
solutions. Here’s what GB had to say about how
the various players compete and the way he sees
platform banks versus payment service banks.
GB Agboola: I think there will be a lot of change,
but the change will just be that everyone will win.
The banks will continue to be the infrastructure
player and the float bankers for everyone, so the
banks are going to win. The telcos, because they
know distribution very well, are going to dive into
payments, into banking, and go aggressive. That
will help to expand the markets. The fintechs
are going to complement everybody. We, for
example, are not competing with the banks or
with the telcos. We’re complementing them, not
competing with them.
Still, the banks that win will be those that
understand being a platform bank and being
able to be an infrastructure bank for a lot of
these players. We want to be there and position
ourselves to complement each of these players
and create more value. I don’t think anybody’s
going to lose, but there will be bigger winners
and smaller winners.
Vijay D’Silva: One recent development is the
planned rollout of the Pan-African Payment and
Settlement System. It is meant to reduce time
for cross-border payments from days down to
minutes and is estimated to eliminate $5 billion
in costs to users. It also highlights the interesting
link between faster payments and the availability
of credit.
GB Agboola: I’m excited for the Pan-African
Payment platform. I hope it comes quickly and
becomes operational. But that said, I still believe
it’s got to be private-sector-led for it to be
successful. The likes of Flutterwave and other
Leapfrogging a generation: Talking with GB Agboola, CEO of Flutterwave
fintechs have got to be powering that platform
to make it work at the scale being expected.
Beyond that, I also feel the reason why Nigeria
is number five on the list of faster payments
is due to a bunch of factors that are beyond
payments. One of them is lack of credit. In a
society where there’s credit, there’s no need
for real-time payments, because the money
will get there. That is very important for people
to understand. Those are the problems driving
our innovation in Africa.
But that said, I think we’ll continue to leapfrog
on that. An example of where we’ve done
that is chips on payment cards. Nigeria did
that before the US did that, to stop fraud and
to enable payment security. That shows our
entrepreneurial spirit and at the same time
shows that our payments infrastructure has
really grown and expanded to meet the needs
of Nigeria and of Nigerians in Nigeria.
Vijay D’Silva: In many ways, GB has a unique
history that led him to this point. He talked
about why and how he started Flutterwave
and how he learned from global players like
Adyen and Stripe.
GB Agboola: I have a software engineering
background. I started my career with PayPal in
the UK, but prior to that, I had started a small
Wi-Fi internet company in London, before
Wi-Fi was a thing. I was buying broadband
from BT [British Telecom] and was reselling
it with PCMCIA cards back in the day. We’d
configure our own wireless networks and do
B2B wireless sharing. So I’ve always been a
software engineer.
From PayPal, I joined GT Bank in both Nigeria
and the UK, and then I went to Standard
Bank, where I worked across Africa, building
technology and products for the bank. I did a
brief stint at Sterling Bank in Nigeria, where I
was responsible for the electronics business,
and then went to Google in the US, building a
piece of Google Pay that became Google Tez
for India. After Google, I built a small payments
company in Nigeria that was acquired by
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 a bank, which I joined. After that, we started
Flutterwave.
I’ve always been in tech and payments and very
interested in technology and business—how we
can drive business value through tech, knowing
that technology does not exist just for technology.
There has to be value being gotten from the entire
process.
Topsy Kola-Oyeneyin: I first met GB when he was
starting out, working out of Venia Business Hub,
a leading coworking space in Lagos. Back then
Flutterwave was just a few guys in a room building
something, and we had no idea how big this was
going to become.
GB Agboola: Flutterwave’s story came from
my experience with the banks. I recall some of
our customers back then were trying to expand
across Africa, and it was hard. For me, that was
very interesting, because I worked for a bank that
was everywhere across the continent. We were
the largest bank by footprint, I think, in Africa at
that time. And we couldn’t help these customers
scale their businesses. It wasn’t because we
couldn’t do it. It was because of the regulatory
barriers, technology barriers, and the lack of
agility on our part to build quickly and scale.
That was one of the triggers behind Flutterwave.
I was wondering, “Why can’t we just build this
infrastructure? Why, if I want to send money to
Ghana, does money have to move from Lagos to
New York, and from New York to Ghana?” It didn’t
make sense to me. If you get on a plane from
Lagos to Ghana, you get there faster than doing a
money transfer. You might as well take the money
in a bag and get on a plane.
I said to my manager back then, “Why are we
doing this?” And he said, “Well, we’re not really a
global bank. We’re a network of banks owned by
the same parent.” That’s where I saw that there
is a need for a third-party player in the middle of
all the banks who can talk to all the banks and
provide some sort of complementary services to
make payments simple for a small margin.
4 Leapfrogging a generation: Talking with GB Agboola, CEO of Flutterwave
The use cases we were seeing back then
included cases like a small merchant in
Johannesburg trying to sell to somebody in
Nigeria. The only way they could get paid
was through a wire transfer, so until the
payer sends a SWIFT [bank identifier code]
acknowledgment, the seller can’t get paid, so
he doesn’t release the goods to the customer.
For me, it was a function of how to put a third
party in the middle that is trusted, that can
indicate to the merchant in Johannesburg,
“This payment is good.” If the payment is
trusted, the seller can release the goods to the
customer.
Those were the driving forces behind
Flutterwave: How do we become like a
butterfly that can create a ripple effect in the
ecosystem and still be tiny, yet we can make
waves? Hence the name Flutterwave, by the
way.
Topsy Kola-Oyeneyin: And what an effect
Flutterwave has had. A number of players
are in the same space with different models.
Some have focused on SMEs, others on large
enterprise customers. But GB’s company
has done the full range and also built
infrastructure for other fintechs. We asked him
to tell us more about how the journey evolved.
GB Agboola: At the beginning, we saw that
payment in Africa is a bit different from
payment everywhere else. The problems are
different. Africa is highly fragmented when it
comes to payments. Every payment system is
unique and works well in its own country, but
they’re not exported well beyond their shores.
Obviously, we can’t just copy and paste a
Silicon Valley or European model. We have to
build what works for our environment.
Early on, we stumbled on enterprise clients,
which gave us an interesting view into the
enterprise world of payments, where you can
get one huge customer and they’re equivalent
to 10,000 SMBs [small to medium-size
businesses] in TPV [total payment volume],
in revenue and volume. So we instantly focused
on enterprise customers. We built a growth team
focused on different sectors—education, gaming,
remittances, e-commerce—building expertise in to
help us understand the problems to solve for each
sector and going from that point to building the
infrastructure.
We didn’t really care about SMBs back then. But
as we started growing as a company, the value
proposition of getting one enterprise client who
gives you so much volume also means that if you
lose them, you’re in trouble, so we started thinking
about how to diversify the business.
Then the pandemic struck. The team came to me
and said, “GB, let’s build a Shopify-like product
but for SMBs and help them sell more, to help
them keep the lights on [during the pandemic
shutdowns].” So we went from a purely impact
perspective and built the Flutterwave store, which
quickly became very successful. We were able
to onboard over 20,000 SMBs on that platform
in a very short period. It was simple. We built in
payment logistics and e-commerce in one. You can
take a photo of what you’re selling, put it online,
and sell it, and then someone can come and pick it
up for you and do delivery.
It went viral quickly. When we saw that, we decided
to invest in SMBs as a sector. That said, we also
believed in building distribution, so we also built a
consumer app that’s like Cash App with the goal of
building remittances for Africans via that product.
Vijay D’Silva: It’s hard to overestimate the value of
data in an environment like this. Most developed
markets built their credit bureaus over 50 years
ago, and there has been a close correlation
between economic growth, credit intensity, and
credit data. But in the last decade, some of that
has been changing with the emergence of other
sources of data enabled by the internet and social
media. From some of our research, the three
biggest benefits are enabling lending, better
targeting, and superior customer service.
Topsy Kola-Oyeneyin: This issue of data is really
important. In markets where data on credit history
Leapfrogging a generation: Talking with GB Agboola, CEO of Flutterwave
does not exist, the availability of payments
data becomes really important in unlocking
credit and opening up new avenues of value
creation.
GB Agboola: The way we see credit is to use
data to drive retention. We’re about to launch
Flutterwave Capital to help give the merchant
consent to share data with the lender, who can
then make a credit decision in their business.
But the interesting part there is helping these
merchants get more access to credit that can
scale and use it to do things like restock their
goods and grow their business.
We see Flutterwave as a transaction-
processing business at its core. There are
channels to drive more traffic to our business,
but they’re not really new products, because
everything happens on one platform. There’s
no new system for our customers to sign onto;
it’s all the same platform. So we see them as
channels that we’re creating to drive more
value onto our platform. We’re like a tollgate.
How do we get more cars to come to our
tolling infrastructure? Do we need to build
more roads? Do we need to help people get
more comfortable to use our platform? That’s
how we see it.
Vijay D’Silva: While Flutterwave’s staff
is mostly based in Nigeria, the company
also has employees in the US, the UK, and
several cities across Africa. One question is
how a fast-growing company manages its
growing complexity across different product
categories, job profiles, and countries.
And how does it find the right talent in a
competitive market for people?
GB Agboola: We’re currently moving folks out
of Nigeria to Kenya, South Africa, Uganda, et
cetera so that they can gain local nuances
about what they are building for the different
markets. We are already seeing the demerit
of having one hub for everything. We need to
be global and local at the same time, so we’re
trying to solve that problem by decentralizing
at the moment.
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 We used to just look for talent that understands
what we’re trying to build and the mission of the
company—where we’re coming from and where
we’re going. This is one of the very interesting
parts of my job. Now we’re thinking more in terms
of understanding other markets.
African talent is really amazing. We have the
best engineers you can imagine, who can see a
problem and by Monday it’s been built, tested, and
is ready to go live. We have to be very agile and
extremely responsive to customer needs. That
is driven by the talent we have. They understand
the need for what we are building. For example,
we’ve got a lot of amazing women at Flutterwave,
from my COO to the head of expansion, head of
operations, and the head of data science. These
folks are really the best people I could imagine to
lead the company.
Vijay D’Silva: At this pace and with this much
going on, Flutterwave will need to maintain its
growth rate while simultaneously managing
risk and compliance. Many new companies hit
different hurdles at each stage of their growth,
beginning with a new product idea, then building
a tech stack, finding the right go-to-market
strategy, scaling it for multiple segments and
geographies, and building the right control
infrastructure.
GB Agboola: The way we see the growth is that
we are not yet processing even 10 percent of
the payment potential in Africa, so it’s still really
early days for us. The opportunity for growth is
still immense. However, we try to listen to our
customers. We follow our customers when it
comes to our growth, our expansion, and how we
move across geographies and sectors.
We see opportunities in consumer products and
a new wave of creative opportunity opening up.
We just acquired a company called Disha that
helps creators get paid for expressing themselves
in multiple forms across the world. They had
about 20,000 creators at the time we acquired
the company and the product, and we will be
enabling payments on that platform. So we’re
6 Leapfrogging a generation: Talking with GB Agboola, CEO of Flutterwave
seeing a bunch of interesting growth areas
at this point. Every other day, we are seeing
companies scaling from Africa to the US and
vice versa; we’re seeing remittances growing
and scaling.
What we didn’t expect was to become the
infrastructure of payments in Africa. There’s
no Africa fintech who is not our customer,
and that’s very interesting. There is no other
infrastructure to pay or get paid across
Africa. So now we are seeing ourselves
more as an emerging-markets payment
processor, not just in Africa. We are starting
to see customers ask us why we can’t do
their payments in Europe, why we can’t do
it in the US. We have customers who have
incorporation in the US and the UK and
Nigeria, for example. A lot of African airlines
are like that. So there is opportunity to drive
value across the board. For us it’s just a
question of forging ahead and continuing to
build that infrastructure.
We have built something we’re very proud
of when it comes to hardware payments,
as the present and the near future are still
offline. Online is growing massively, but it’s
going to be a very interesting mix. We want
to be a player in both and scale that. We’re
very bullish about payments in Africa and
emerging markets. We think we can be the
infrastructure that makes it happen. Last
time we checked, there are over 20 fintechs
in Africa that exist because we exist.
Vijay D’Silva: More and more global firms
are focusing on Africa as the next wave of
growth. This means global firms have a lot to
think about regarding their Africa expansion
strategy and the trade-offs of different
options, including whether to build or buy or
form partnerships.
GB Agboola: Africa is different. Africa is
really, really hard. The grit you require here
is at a different level. There are a lot of
infrastructure challenges you have to cope
with. There, in my opinion, lies the opportunity. We
need to solve those problems, create the value,
and sell that value to people who are willing to pay
for it. That’s what you’re seeing across the board
in Africa.
Having lived in both worlds, I know the problems
I’m solving in Nigeria are not problems in the US.
So the only place to solve it is here in Africa, not
in the US or in Europe. But that said, there are a
lot of similarities with building a business in other
places, in the sense that you have to be willing to
knock down imaginary walls to be able to move
forward sometimes.
The market here is also extremely nuanced. You
have to respect the market, even if you’re from
Africa. Africa is a continent; every country is
immensely different, and every country has
its own interests, challenges, regulation, and
approaches. Some have exchange control, for
example, and some do not. It’s just different
across every market. What we’ve been able to do
at Flutterwave is to make that one API and behind
the scenes abstract all those unique aspects to
make payments simple.
Vijay D’Silva: Building a financial business
anywhere is not for the faint of heart. In Africa,
this is particularly true. According to the African
Development Bank, in 2020 Africa saw its worst
recession in half a century, triggered by the
pandemic. And while the region will rebound
in 2021 and 2022, according to the IMF, sub-
Saharan Africa is likely to recover more slowly
than other regions, while poverty levels remain
high even in the larger economies like Nigeria.
Economic growth may be fastest in smaller
countries like Rwanda or Seychelles and outside
Vijay D’Silva is a senior partner emeritus of McKinsey’s New York office, Topsy Kola-Oyeneyin is a partner
based in the Lagos office, where Edem Seshie is an associate partner. Olugbenga “GB” Agboola is CEO and
a cofounder of Flutterwave.
Copyright © 2022 McKinsey & Company. All rights reserved.
Leapfrogging a generation: Talking with GB Agboola, CEO of Flutterwave
the traditional oil and mining sectors. On
the other hand, the promise of Africa could
be greater than ever now. For anyone who
believes in the value of human capital,
Africa is the youngest continent by far
and getting younger: over 40 percent of
Africans are under 15 years old, compared
with 16 percent for Europe and 18 percent
for North America. Even Asia and Latin
America are aging.
The GSM Association (the mobile network
operator trade group) now projects
that mobile internet penetration will
increase from 300 million users in 2020
to almost 475 million in 2025. To put that
in perspective, more Africans will come
online in five years than half the population
of the US. The story of modern African
financial services is only just beginning.
Matt Cooke: It’s Matt Cooke here again.
On behalf of McKinsey’s Banking &
Securities Practice, thanks for listening
to Talking Banking Matters today. We’ve
got a series of conversations planned,
so we look forward to you retaking your
front-row seat to listen in on more industry
leaders from the world of fintech, banking,
and digital talk about their work shaping
the future of this industry. For now,
wherever you are today, thanks again for
listening.
Comments and opinions expressed by
interviewees are their own and do not
represent or reflect the opinions, policies,
or positions of McKinsey & Company or
have its endorsement.
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