Former CEO of Africa’s most valuable startup Flutterwave, Iyinoluwa Aboyeji, has responded to the recent allegations of fraud and insider trading levelled against the company’s management and current CEO and co-founder, Olugbenga Agboola.
The accusations were laid out in an article by David Hundeyin, and a Medium post by Clara Wanjiku.
While both Wanjiku and Hundeyin’s articles raised important questions about the culture, ethics, and governance at Flutterwave, Aboyeji claims no privileged insight into the company after his time there. He however addressed concerns raised about things that happened while he was CEO of the payment giant.
One of the many actions Agboola was accused of was creating a ghost “co-founder” identity, who went by the name Greg, to give himself more shares, in the company’s early days. To this, Aboyeji told TechCabal that the agreement between the co-founders was that Agboola would hold some shares in trust for the fictitious Greg.
“When I joined the company, I was told there’s a chief technology officer named Greg, who’s from MIT, whom I’d meet someday. It never happened,” Aboyeji said. “After a while, it became clear what had happened. By that time it didn’t matter. We [Aboyeji and third co-founder Adeleke Adekoya] had already signed agreements, and I decided to just move on.”
Earlier this week, on Wednesday, April 13, Aboyeji had put out a series of tweets, aimed at distancing himself from any involvement in the allegations levelled at Agboola and Flutterwave. He said, in one of them, that some of the allegations made could prevent him from being a company director, and thus affect his livelihood.
He also said that Hundeyin, the article’s author, didn’t reach out to him for comment.
The article alleged that Agboola did not resign from his job as Head of Digital Factory and Innovation at Access Bank before working at Flutterwave. It said Aboyeji had been a co-conspirator who had testified, alongside Agboola and Access Bank CEO Herbert Wigwe, before the US Securities and Exchange Commission (SEC), under oath, that Agboola never worked simultaneously at Flutterwave and Access Bank.
Aboyeji’s time as CEO
Launched in 2016 as a Nigerian and US-based payments company, with offices in Lagos and San Francisco, Flutterwave was co-founded by Agboola, Adekoya, and Aboyeji, who had earlier co-founded Andela. TechCabal obtained a copy of Flutterwave’s US certificate of incorporation, prepared by Aboyeji on May 2, 2016.
Flutterwave started when Aboyeji met the other co-founders Agboola and Adekoya while still at Andela.
Access Bank had hired an engineer from Andela to work on a product that later turned out to be PayWithCapture, a mobile payment solution that permitted customers to make payments by scanning a merchant’s pre-generated QR code using their phone cameras.
After a series of conversations about the African payment landscape, Aboyeji, Agboola, and Adekoya teamed up to start Flutterwave, to solve the challenges with African payment. Agboola and Adekoya had the ideas; Agboola came on board to execute.
In the early days of Flutterwave, the co-founders were still working at their previous jobs. Aboyeji explained that although the trio had agreed to a transition timeline towards working on Flutterwave full-time, there were challenges with adhering to that timeline. Flutterwave investors were made aware that Agboola and Adekoya had transitioned from working for the bank to consulting for the bank through an investor update.
“My co-founders informed me that they’ve resigned from Access Bank, but they had to give some notice to the bank, and since they were handling sensitive positions at Access Bank, what ended up happening was they became consultants to Africa Fintech Foundry,” Aboyeji said. Africa Fintech Foundry is an initiative by Access Bank that nurtures and accelerates the growth of fintech startups in Africa.
Aboyeji described the relationship between Access Bank and Flutterwave as a mutually beneficial one. Access Bank was the budding fintech’s banking partner and Flutterwave helped introduce the bank to its Silicon Valley network.
He also disclosed that, early on, when the company started, there were ongoing conversations with Access Bank to invest in Flutterwave, but due to Nigerian banking regulations that prohibited banks from getting involved in non-banking activities, the deal couldn’t happen.
“The foundation of Flutterwave was as a result of the collaboration between a bank and the local tech ecosystem. I think that’s an incredible learning opportunity,” Aboyeji said.
TechCabal has reached out to Access Bank to comment on their relationship with Flutterwave’s founders but hasn’t gotten a response as of press time.
In an investor update obtained by TechCabal, covering Flutterwave’s activities from May 2016 to June 2017, Flutterwave’s investors were informed that the SEC had opened an investigation into the company and its investors.
As seen in a legal brief by Orrick, a US law firm, Flutterwave had 85 investors, and there was concern that some of them were not qualified to be investors under US law.
“To invest in a startup in the US, you have to be a US resident, an international investor who can claim to be a Reg S investor or a close family, friend, or employee of founders,” Aboyeji said. “The SEC were concerned about whether we had followed the right process in making sure the investors were accredited. We proved that every investor was profiled and qualified under the required exemptions.”
After the SEC’s initial enquiries, further investigation on Flutterwave, as related to this matter was closed, according to a letter from the SEC dated September 28, 2017. There was no other investigation made by the SEC outside of this incident during his tenure as CEO, according to Aboyeji.
Change of name
After the initial fictitious Greg co-founder incident, there were accusations of instances where Agboola often changed his first name to Greg when communicating with external parties.
Aboyeji acknowledged being aware of this happening on a few occasions, stating that it sometimes happened when Agboola, who was already well known as an Access Bank employee—but now with Flutterwave—needed to engage with other banks.
“That was the context to which I understood him using Greg. Otherwise, as a result of the hostility among banks, other banks can just say, ‘You’re from Access Bank, we will not use you.’ While we’re not Access Bank. We’re Flutterwave,” Aboyeji said.
In October 2018, when the news broke out that Aboyeji was stepping down from his role as Flutterwave CEO, there were rumours that all wasn’t well, and that he had been fired. Aboyeji explained to TechCabal that his departure was due to differing opinions with Agboola on how the company should be run.
“It’s very simple. GB [Agboola] and I started butting heads,” Aboyeji said. “He wanted input on things that I felt were my responsibilities, and he didn’t want input on things he felt were his responsibilities. And I said there can’t be two captains of this ship.”
By mid-September 2018, during a board meeting, Aboyeji stated that he wanted to leave the company and suggested that Agboola, who was then Chief Product Officer, be brought in as a product-focused CEO.
Aboyeji offered to leave Flutterwave within 6 months, to allow for a smooth transition. But the board said that there was no need for that, suggesting he could hand over immediately.
“I thought it was rather sudden, but I agreed because I already wanted to leave,” Aboyeji said.
After a few weeks of negotiating the terms of his exit, on October 12, 2018, Aboyeji sent an email announcing his decision to resign as CEO and board member at Flutterwave. A copy of this email was shared with TechCabal.
Aboyeji maintains that his exit followed due process and that he currently doesn’t own a stake in the company; he also insists he wasn’t forced to sell his shares at a lower price.
“How can someone force me to do that? I didn’t sell my shares to GB [Agboola]. I sold my shares to a third party. I fully exited Flutterwave at the $1 billion valuation round last year.”
Aboyeji also shared his thoughts on past Flutterwave employee Clara Wanjiku’s recent account of Flutterwave neglecting to remove her as the contact person on their M-Pesa account, resulting in the police hounding Wanjiku and her family after the account recorded a fraudulent transaction.
He said he doesn’t think it was intentional. Based on his experience, the company’s negligence was due to not having a process to properly off-board employees when they leave.
“I kept getting Flutterwave bank alerts for over a year after I left,” Aboyeji said. “I’ve run into trouble with the authorities because Flutterwave still had me listed as a point of contact, long after I left.”
These allegations come 2 months after Flutterwave raised $250 million in a Series D round that tripled the company’s valuation to over $3 billion in just 12 months.
Led by Agboola, Flutterwave has grown to become a beacon of success in the African tech ecosystem, with Agboola seen as not just a successful entrepreneur but a notable investor in the African startup space.
In its last fundraising announcement in February, the company revealed that 900,000 businesses globally use Flutterwave to process payments, in 150 currencies, up from 290,000 businesses, as at March 2021. This threefold increase means that the African payment giant has now processed 140 million transactions worth more than $9 billion since its inception.
TechCabal has repeatedly reached out to Flutterwave for comment but has not received a response as of press time.
Flutterwave is a sponsor of one of TechCabal’s newsletters, TC Daily, and headline sponsor of an upcoming CNBC Africa/TechCabal show, The Next Wave. Flutterwave CEO Olugbenga Agboola was also a small investor in Big Cabal Media’s recent $2.3 million seed round. Iyin Aboyeji is an early investor in Big Cabal Media.