The Flutterwave Scandal
The Flutterwave Scandal it has been alleged that hackers stole $3.6 million from customers’ accounts. The company has filed a lawsuit against the hacker.
Its CEO Olugbenga Agboola is accused of using a fake co-founder identity to steal more shares. He is also accused of offering share prices well below the company’s valuation to former employees who wanted to cash in their vested options.
CEO Olugbenga Agboola
Flutterwave is one of Africa’s most valuable startups, and its CEO Olugbenga Agboola is a well-known name in the fintech startup space. However, he’s now the center of a scandal involving alleged unethical business practices. This scandal threatens the company’s valuation and reputation, as well as the investment climate in Nigeria.
According to a recent report, Agboola created a fictitious co-founder identity and offered employees share prices below the company’s valuation to cash in on their vested options. This allegedly violates US insider trading laws, which could lead to criminal prosecution.
On April 4, Clara Wanjiku Odero, a former head of implementation at Flutterwave, posted an explosive article on Medium. She alleged that she was harassed by the CEO and had to fight to get her payments cleared after leaving the company. She also accused the company of withholding her ESOPs. The allegations have prompted a freeze on the company’s assets in Kenya. Despite this, the company has denied the claims and said that it will defend itself.
Former employee Clara Odero
Flutterwave was a darling of Africa’s tech ecosystem until allegations of sexual harassment and toxic work culture emerged. The allegations caused investors to pull out, including Visa. The scandal could also affect the company’s growth and reputation.
The controversy centered around a former employee, Clara Odero. She posted an explosive article on Medium claiming that CEO Olugbenga Agboola harassed her and her colleague. She also accused the company of negligence that led to fraud. Her allegations opened up multiple directions revealing many dubious cases about the practices and culture followed at the fintech.
Rest of World spoke to 12 other former employees of Flutterwave who validated the information in Odero’s post. They claimed that her allegations reflect recurring issues at the start-up. In the past, the company has brushed off such complaints, but these recent claims have shaken up the investor community. The $3 billion fintech will now need to rebuild its image. The company is focusing on improving HR policies while working closely with audit and advisory firms, offering mental health resources to employees, and increasing transparency.
The scandal surrounding Flutterwave has sparked debate over the role of investors in the company. Earlier this month, the fintech unicorn was accused of misappropriating funds by its co-founder and CEO Olugbenga “GB” Agboola. He is also alleged to have engaged in sexual harassment and other shady practices.
Flutterwave is one of Africa’s most valuable startups, with a valuation of more than $3 billion. Its product offerings include a mobile payments platform, a remittance service, and a Shopify-like e-commerce store for small businesses.
In a recent Medium post, former employee Clara Odero accused the company’s CEO of sexual harassment and other dubious behavior. Other former employees told Rest of World that Odero’s allegations are not isolated and reflect recurring issues at the company. The scandal could damage Flutterwave’s reputation and deter potential investors. It could also impact Nigeria’s tech ecosystem, where the startup is a poster child for fintech innovation. Flutterwave’s investors include Tiger Global, Y Combinator, and Avenir Growth Capital.
The company rebutted the allegations and said that it had not been hacked. It also said that a routine check of its transaction monitoring system had identified unusual patterns on some accounts and had frozen them immediately. Moreover, it has also taken steps to strengthen its internal governance structures. It has recently hired Mastercard alumni Emmanuel Efenure as its new VP and head of risk for Africa, and it is partnering with the big four audit firms to support independent internal review programs that will subject all company policies to annual reviews in areas such as AML/CFT.
This case underscores the need for fintech companies to prioritise transparent operations and strong internal controls. It also shows that regulators will not tolerate lax compliance. As fintechs expand across Africa, they will have to prioritise these principles. Otherwise, they will be at risk of regulatory scrutiny and asset freezes. This will hurt their growth potential and undermine their credibility.