Africa’s largest payment company, Flutterwave, has partnered with US-based private-credit startup Techdollar to allow its employees to borrow money using their Flutterwave shares as collateral. This gives shareholders another way to get cash out of their paper wealth without selling their shares.
Startup employees are sometimes paid partly in equity, particularly at young companies. This means someone who joined early can end up owning shares that are worth a lot on paper as the company raises money and its valuation climbs. Normally, if a shareholder wants to turn those shares into cash, they need a buyer.
Flutterwave’s arrangement with Techdollar is different. The shareholder pledges eligible Flutterwave shares as collateral and receives a loan from Techdollar. They own the shares, but the lender has a claim on them if the borrower fails to repay. This arrangement is made possible by Flutterwave’s $3.25 billion valuation.
This allows employees to access cash without giving up exposure to the company’s potential growth.
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Industry context
CANAL+ has completed its takeover of MultiChoice. While CANAL+ is growing strongly in French-speaking Africa, MultiChoice is dealing with falling subscription revenue in its biggest market, South Africa.
MultiChoice revenue fell 3% on a like-for-like basis in the nine months to September. This decline was largely due to lower subscription income in South Africa. Despite this, CANAL+ is responding by launching unbundled packages and spending on sports rights.
Between the lines, CANAL+’s strongest African business and its newest acquisition are moving in opposite directions.
