Fraud, Perjury, & Insider Trading At Flutterwave - David Hundeyin

 Flutterwave: The African Unicorn Built On Quicksand

Fraud, perjury and insider trading? All in a day's work. A glimpse at the dark underbelly of Africa's biggest fintech superstar

David Hundeyin

On the night of Sunday March 20, 2022, a particular WhatsApp group wouldn’t stop buzzing.

Word had got out that a big story that would shake the Nigerian tech space was coming out the next day. Rumour had it that the story was about Nigeria’s highest valued tech unicorn and that the fellow working on it was a certain enfant terrible of Nigerian journalism. For an unspecified reason, this was very bad news.

Dedicated to Nigerian Tech PR and networking, this WhatsApp group became Ground Zero for the preemptive response to the story, whose very existence was still a rumour. Lawyers were scrambled, friendly journalists were put on notice, social media assets were readied, and a lengthy press release was hurriedly slapped together in response to a story which at that point, consisted of 6 lengthy call transcripts, several unconnected Google Keep notes, a 55MB folder of screenshots and PDF documents, and a rough draft inside my head.

Head Fake: The Story That Never Was

Even though the following days came and went without any sign of the story, Flutterwave’s PR efforts stayed firmly in overdrive throughout this time. First came a flurry of activity in the above-mentioned WhatsApp group when one of the company’s ex employees whom I reached out to for general comment politely said no, only for a screenshot of my conversation with him to start making the rounds a few hours later.

Then came the barrage of calls and messages from everyone connected to Flutterwave with whom I had spent the past 6 months in quiet correspondence while researching the story. They all wanted to know, “Why did I just get a call from Flutterwave? I hope I’m not in trouble. Did you tell them I’m talking to you?” “Trouble?” I silently wondered. “It’s a former workplace, not a religious cult, and you’re all adult professionals, not bullied teenagers - what on earth are you so afraid of?”

Then came this from my editor, informing me that - story or no story - Flutterwave was going to put out something in response to whatever it thought my story was going to be about. Someone not in the know might have wondered - why is a $3bn unicorn so terrified about a story that doesn’t even exist yet? What does it have to hide?

Unsurprisingly, when the material in question - a fawning 2,300-word PR interview - eventually emerged on April 3, it was an attempt at a direct response to the issues mentioned in the request for comment above, namely employee stock option fraud, sexual harassment and workplace bullying. A little amusingly, it contained a facile attempt to respond to a serious insider trading issue that I briefly teased with an ex employee who had spent our 45 minute conversation referring to Flutterwave as “we.” She incidentally, showed up at the Flutterwave Retreat in Accra, Ghana a few days later.

None of this came as a surprise at that point. Since my introduction to the weird internal world of Flutterwave in October 2021, I had witnessed erratic behaviour, sudden panic attacks, group bullying and inexplicable bad faith actions by current and ex staff among each other, competing to get into the good books of a larger-than-life founder who has transcended his birth name, and is now only known by his initials, “GB.”

Thinking of Flutterwave as simply a business that processes electronic payments would be like thinking of the New York Mafia as a group of pizza shop owners - there certainly is that, but there is also so much more going on under the hood. This is precisely why I intentionally leaked word of my story 3 weeks ago in hopes of seeing what else this cage-rattling would uncover. I say “what else” because contrary to what I told most of the 17 current and ex-Flutterwave sources I spoke to, this is not in fact, a story about sexual harassment or workplace bullying. It’s not that those things aren’t present in this story - it’s that the real story makes them seem positively trivial in comparison.

Before we get into that, here is a quick round-up for the benefit of readers who have been living under a rock for the past 3 weeks. After my head fake 3 weeks ago, Flutterwave eventually blinked first and pushed out a lengthy press release attacking 2 former employees suspected of being my sources, including former Flutterwave Head of Implementation, Clara Odero. This turned out to be a mistake. Clara, who runs Credrails these days and does not lack a spine of her own, decided to hit back. A few hours after the Flutterwave press release went out, this happened:

If you’re all caught up, it is now time to dive into a story that is a lot more sinister than you would think. To take us through this weird timeline of events from 2016 to date, I will introduce my 4 principal sources and co-narrators. “Ose”, “Sheyi” and “Temi” are the names chosen to shield their identities. Apparently, merely being suspected of speaking out against Il capo di tutti i capi - he of the double consonant initials - could be a red card for any subsequent efforts to work in Nigeria’s small and highly incestuous tech space. Preserving their anonymity is key, so the only detail that will be volunteered is that they are all among the first set of Flutterwave staff, and they all left the company between 2018 and 2021. Here are their stories.

Jennifer: The Consultant Versus The (Lack Of) System

Jennifer joined Flutterwave in September 2017. Coming from a senior role at a Big 4 consultancy, it took some doing to convince her to join Flutterwave in the first place. She recalls that she actually had a job offer at Access Bank before The Man stepped in. The Man here is Olugbenga Agboola, also known as “GB,” (and sometimes “Greg” - more on that later).

GB somehow convinced Jennifer to take the plunge into a 16 month-old fintech startup. Apparently, GB is blessed with the gift of persuasion, which becomes a recurring theme in the course of this story. Key to Jennifer’s decision to turn down an already-accepted, cushy job offer at one of Nigeria’s largest banks was the once-in-a-lifetime opportunity to join an early stage high growth startup and take advantage of its stock compensation plan. Over and above simply earning a salary, such shares in a sufficiently valuable startup can be financially life-changing. Flutterwave was not coy about it either. The offer was printed in her employment letter, and then in her confirmation letter 7 months later.

She also had no problem with performance on the job, as evidenced by the following documents from her case, which is currently at the National Industrial Court where she is locked in litigation with Flutterwave.

According to court records, Jennifer’s problems at Flutterwave began when - for whatever reason - she fell out of favour with GB despite clearly having no issues with job performance. A list of witnesses in the case summary reveals a list of Flutterwave staff who joined the company around the same time or even later, and some of whom resigned before she did. They all received the stock options promised to them. Jennifer however, did not, despite repeatedly bringing up the subject with GB.

For legal purposes, Jennifer did not agree to be quoted directly in this story, but she did however confirm that former Flutterwave CEO Iyinoluwa Aboyeji signed off on the letter offering her 40,000 shares, which at current market valuation, are worth roughly $2 million. This letter however, vanished into a black hole shortly thereafter, when Iyin was abruptly and unexpectedly fired by GB, leaving him locked out of all company resources including his official email. (More on that later too.)

GB meanwhile, continued to sign off on stock option offers for his preferred office favourites, which created a confusing situation for Jennifer. On the one hand, he continued to praise her work regularly and she consistently met or exceeded her performance targets. On the other hand, only those who kissed the metaphorical ring would get these entitlements that were written in their job offer letters.

Perhaps more meta was the fact that even those who managed to get their stock packages ended up receiving pitiful offers that were far below market value for their shares. In February 2021 for example, this ex-employee who asked to be completely anonymous was given an offer of $3.50 per share.

The actual market value of Flutterwave shares, as explained in a recent call with a potential Flutterwave investor below, was closer to $20. In other words, GB only permitted this (apparently fortunate) employee to get roughly 17.5 percent of the value of his shareholding. These shares, I was reliably informed, are only permitted to be sold to an investment vehicle controlled by none of other than GB himself at the price he decides. Anywhere else, this would be classified as insider trading. In Nigeria?

It’s Tuesday.