Africa’s largest fintech firm, Flutterwave, has acquired Nigerian open banking startup Mono in an all-stock deal valued between $25 million and $40 million, in accordance with individuals aware of the transaction.
The acquisition brings collectively two of Africa’s main fintech infrastructure firms. Flutterwave operates one of many continent’s widest funds networks, whereas Mono, usually described because the “Plaid for Africa,” has constructed APIs that enable companies to entry financial institution information, provoke funds, and confirm clients.
Mono has raised about $17.5 million from buyers, together with Tiger International, Basic Catalyst, and Goal International. Sources near the deal mentioned the acquisition allowed buyers to a minimum of recoup their capital, with some early backers seeing paper returns of as much as 20x based mostly on the implied valuation of the inventory they obtained from Flutterwave. Mono will proceed to function as an unbiased product, the businesses mentioned in an announcement.
Based in 2020, Mono, like Plaid, makes use of APIs that enable customers to consent to sharing their financial institution data, enabling monetary establishments to research revenue, spending patterns, and reimbursement capability.
The corporate addresses the shortage of standardized entry to financial institution information throughout African markets, the place credit score bureaus stay restricted and fintechs, particularly lenders, usually depend on clients’ financial institution transaction histories to evaluate creditworthiness.
In accordance with CEO Abdulhamid Hassan, almost all Nigerian digital lenders now depend on Mono’s infrastructure. The corporate claims to have powered greater than 8 million checking account linkages, protecting roughly 12% of Nigeria’s banked inhabitants. It additionally claims to have delivered 100 billion monetary information factors to lending firms and processed thousands and thousands in direct financial institution funds. Prospects embrace Visa-backed Moniepoint and GIC-backed PalmPay.
For Flutterwave, which powers native and cross-border funds throughout greater than 30 African international locations, the deal deepens its vertical integration. Along with funds, the corporate can now supply onboarding and identification checks, checking account verification, data-driven danger evaluation, and one-time or recurring financial institution funds inside a single stack.
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Flutterwave CEO Olugbenga “GB” Agboola framed the acquisition as a guess on Africa’s subsequent part of fintech progress. “Funds, information, and belief can’t exist in silos,” he mentioned. “Open banking gives the connective tissue, and Mono has constructed vital infrastructure on this house.”
Hassan echoed that view, arguing that Africa is coming into a credit-driven part as governments throughout the continent push lending-led monetary inclusion initiatives. That transition depends upon each substantial information infrastructure and regulatory confidence, notably in markets like Nigeria, the place open banking frameworks are nonetheless evolving.
“If the financial system goes to be credit-driven, you want deep information intelligence to understand how individuals earn and spend,” Hassan mentioned. “However on the similar time, for open banking to actually work, regulators have to be assured that buyer funds are secure.”
Towards that backdrop, becoming a member of Flutterwave positions Mono to scale shortly as soon as regulatory limitations fall. Flutterwave already operates throughout dozens of African markets, with native licenses, enterprise clients, and compliance groups in place.
“This enables us to broaden what’s attainable for companies working throughout African markets whereas staying grounded in safety, compliance, and native relevance,” Agboola mentioned.
The transaction mirrors earlier consolidation makes an attempt in world fintech infrastructure, together with Visa’s failed acquisition of Plaid in 2020, which was blocked by U.S. regulators. Hassan cited that deal as proof that combining information infrastructure with fee rails can unlock scale.
Each Y Combinator-backed firms rely Tiger International (which was the lead investor in Flutterwave’s Collection C and Mono’s Collection A) amongst their backers. Hassan mentioned, nonetheless, that the agency didn’t facilitate the transaction. As a substitute, the deal grew out of a longstanding working relationship between the 2 firms, which had partnered on a number of financial institution fee merchandise over time.
That collaboration performed out towards an open banking panorama that has modified considerably over the previous 5 years.
When Mono launched, it confronted competitors from firms similar to Base10 Companions-backed Okra and Ribbit Capital-backed Sew. Since then, Mono has emerged as a number one participant within the house, following Okra’s shutdown and Sew’s pivot towards a deeper funds ecosystem play that has allowed it to lift considerably extra capital.
Addressing Mono’s monetary place forward of the acquisition, Hassan mentioned the corporate, which, in accordance with PitchBook, raised $15 million in Collection A at a $50 million post-money valuation in 2021, was not pressured right into a sale to Flutterwave and is on monitor towards profitability this 12 months. With important money reserves, he added, elevating one other spherical would have launched new valuation and progress expectations in a troublesome funding surroundings.
Nonetheless, past the 2 firms concerned, the transaction — just like the consolidation between South African fintechs Lesaka and Adumo — indicators a broader inflection level for African fintech, the place startups that after aspired to turn into standalone giants might more and more discover higher outcomes by integrating into scaled platforms.
