Kenya has dropped its claims of financial misconduct against Flutterwave, providing the country with a much-needed victory in the public eye since it became involved in controversies.
Bloomberg was the first news source to report that the accusations against Flutterwave had been dropped by a high court in Kenya on the 4th of February, 2023.
The decision to remove those accusations comes two months after similar allegations made against Korapay, another Nigerian fintech startup, were also dropped, and both cases resulted in that company’s charges being dropped. Charges against three other Nigerian start-up companies were also dismissed against them.
After suffering a blow to its reputation in 2022, Flutterwave stands to benefit tremendously from the conclusion of this protracted court battle. The allegations of inappropriate behaviour in the workplace as well as the claim that some employees were duped out of stock options, were rejected by the company; yet, the onslaught of negative press caused the startup to lose some of its lustre.
It is possible that the public markets will thwart the company’s plans to go public in the near future. As things progress, though, there is little question that it requires some encouraging news.
Read also: Flutterwave and Tobi Amusan Launch $end Mobile App for Easy Funds Transfer
Earlier Events Surrounding the Case Against Flutterwave
The legal proceeding against Flutterwave, which was resolved in 2023, was initiated in July 2022, when the company was brought before the court on suspicion of card fraud and money laundering.
As a direct consequence of this, the court ordered the financial institution holding 6.2 billion Shillings (in a variety of Kenyan banks) to freeze those funds. The statement was made at the time by Kenya’s Assets Recovery Agency (ARA).
“The 1st Respondent’s (Flutterwave) bank accounts received billions in a suspected scheme of money laundering and the same deposited in different bank accounts in an attempt to conceal or disguise the nature, source, location, disposition or movement of the said funds,” ARA said at that time.
Flutterwave vehemently denied any impropriety at the time and stated that each of the transactions in question could be independently verified.
They claimed in their statement at the time that because they processed significantly large volumes of money and contributed to the growth of the economy in Kenya and the rest of Africa by facilitating payments for the largest organisations in the world and everyday businesses, they contributed to financial inclusion in Kenya.
Part of the statement reads: “By facilitating payments for the biggest organizations in the world and everyday businesses, we process significantly large volumes of money and contribute to growing the economy in Kenya, and the rest of Africa.”
Flutterwave’s IPO Plans
Since it was first established, the colossal fintech company has successfully raised more than $450 million from venture capital funds. On the basis of the company having annualised revenue of $100 million in 2021, investors valued the company at over $3 billion during its most recent round of funding.
An initial public offering (IPO) for the company Flutterwave will give early investors the opportunity to earn large returns on their investments, as the company’s growth is expected to continue unabated.
In addition to that, it will assist the company in raising even more money while simultaneously providing the general public with the opportunity to own a portion of the company.
In addition, the company stated that its “strong balance sheet allows for the flexibility to fund operations through existing cash or through private capital” in the event that an initial public offering is not a viable option for the business.
This is a signal that the corporation is not ruling out the possibility of raising money in the event that the IPO does not fail to materialize.
Despite the challenges Flutterwave is faced with, it still tries to forge ahead.