Flutterwave’s recruitment of 200 newly graduated trainees in anticipation of a Fintech winter
Fintech in Africa has witnessed huge leaps in recent years. According to data from Disrupt Africa, 564 African tech startups raised a combined $2.1 billion in 2021. Growth has continued into 2022 with inflows of $2.7 billion from January 2022 to May 2022, more than double the 1.2 billion dollars in the first five months of last year, according to data compiled by Futuregrowth Asset Management.
2022 was shaping up to be an important year for global VC gains, until the Russia-Ukraine crisis started. This unprecedented historical event has led to a global economic downturn, a decline in capital and cryptocurrency markets, and concerns about a recession in the United States. At the beginning of Q2 2022, Fintech Investors started asking for more shares for less money as a result of an impending capital crisis; a phenomenon experts call a ‘Fintech Winter’.
The entire global venture capital industry is undoubtedly experiencing a “winter”, and as a coping mechanism, Fintech companies are at best halting all hiring or at worst laying off employees en masse. This phenomenon has affected both large and small companies such as Shopify, Coinbase, Twitter, Olive, Meta etc. Some other companies have announced a hiring freeze.
In the African Fintech ecosystem, some cracks have appeared, showing that the global winter is likely to affect the African continent. Wave, a mobile money payment technology company serving Francophone Africa has laid off 15% of its staff. While some industry watchers claim this is not far off due to Fintech Winter given that they raised an additional $90 million after a previous $200 million – the largest Series A round, others believe it is a strategic move pre-empting the market. Apart from Wave, no other Fintech company in Africa has reportedly shown signs of distress as at the time of writing this article. Some, like Flutterwave, are showing exceptional signs of strength and growth with their recent hiring blitz.
Flutterwave, one of Africa’s leading technology companies, has just announced the hiring of 200 graduate trainees. The announcement comes after a month-long recruitment process that saw 11,000 candidates apply for 200 vacancies. The newly appointed Chief People and Culture Officer at Flutterwave, Mansi Babyloni, said the project was a passion project from the People and Culture Team and they are committed to making a positive impact on the trainees. Adding 200 employees to the books, a staggering 38% increase in headcount, is a sure sign of strength and growth for the company and also for the ecosystem in Africa, emphasizing loud thoughts that the African Fintech ecosystem has long been isolated from global sources of stress, from a variety of factors.
There is disagreement about the validity of these factors. A key perspective is that African startups only enjoy about 1% of global VC funding. While this is true, it makes sense to understand that in winter, despite the share of other countries, the regions with the greatest risk tend to receive the least funding. Therefore, even 1% can be further cut if the African ecosystem is considered more risky than the other markets. Is it possible that the global VC ecosystem considers Africa a lower risk market than its US and EU counterparts at a time like this?
Another perspective is that which argues that African Fintechs solve real problems that customers are willing to pay for, such as cross-border payments, money transfers, logistics, etc. But other markets also solve the problems that are prevalent in their markets. If that’s the case, then it’s possible that the most viable reason African startups have weathered this storm and are even booming in growth and funding is that they’ve always been accurately valued and their core growth metrics taken very seriously. consideration for during collections.
By Chris Akinbami
