Afridigest Fintech Review: The Flutterwave hack that wasn't

Week 10 2023: March 5-11

The Afridigest Fintech Review is a weekly recap of what happened in African fintech.

Hello again, friends! Remember: this Fintech Review goes out on Sundays and the regular Week in Review goes out on Mondays. If you appreciate our work, upgrade your subscription today.

On to the week’s highlights:

• Zero fintech deals announced this week.

• A quick glance at the story of fintech in Francophone West Africa over the last decade.

• The top tech news of the week globally was SVB’s collapse, but we’ll save our words for tomorrow’s Week in Review. Across Africa, however, the fintech news of the week was Flutterwave’s no-hack hack which we touch on below.

• Companies appearing in today’s Fintech Review: Flutterwave, Clickatell, Taly, Kuda, Cassava Network, Pesapal, Fingo, M-PESA, Ruubby, Stitch, Accrue, & more.

• Executives appearing: Carbon’s Ngozi Dozie, RedCloud’s Justin Floyd, Moniepoint’s Pawel Swiatek, Moniepoint’s Omondi Ochieng, Capital Art’s Karabo Morule, Kashier’s Mohamed Mohsen, Awabah’s Tunji Andrews, Mastecard’s Victor Ndlovu, MagmaTech’s Jacqueline Brondberg Aby, 4G Capital’s Wayne Hennessy-Barrett, Bank of Kigali’s Obinna Ukwuani, & more.

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Week 10 2023: March 5-11

💸 Fundraises

We’ll double check, but looks like no fintech fundraises were announced this week.

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💸 Investor Activity

INVESTOR ACTIVITY

• Nigeria’s EchoVC formally launched EchoVC Chain, its $8M pilot blockchain-focused seed fund.

• EMURGO Africa and Kepple Africa Ventures established a joint venture to invest in African Web3 businesses.

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📰 News of the Week

• On February 28th, Fast Forward’s Opeyemi Awoyemi tweeted a thread that included the following:

  Opeyemi Awoyemi @opeawo

  They are taking advantage of api weaknesses to move money out of accounts and wallets. There are hacker forums that sell stolen API keys and secrets as well as flaws of known payment platform APIs.

• And on March 3rd, Educare’s Alex Onyia shared the following:

  Alex Onyia @winexviv

  Flutterwave has been hacked by Omar Edewor Trades with bankk account number (1637479865 Access Bank) and several millions of naira have been stolen from peoples accounts. Everyone should generate a new API Key.

• In last Sunday’s Fintech Review, I shared news reports that hackers reportedly stole over $6M from Flutterwave accounts — and I clarified that “I heard this was from merchant accounts, not Flutterwave itself.”

• That same day, Flutterwave released a blog post saying that “Flutterwave has not been hacked.”

• The statement continued, “some users … might have been susceptible,” but “no user lost any funds … [as we] were able to address the issue before any harm could be done.”

• But days later TechCabal published an article that included “court documents [that] raise questions about Flutterwave’s version of events.”

• Those documents, dated February 20, 2023, show Flutterwave “asked for police assistance to recover funds by obtaining court orders … to sustain account freezes on 107 accounts in 27 banks that allegedly received money from illegal transfers from Flutterwave accounts,” and some or all of those account freezes were apparently granted.

• Anger at the account freezes, coupled with Flutterwave’s lack of transparency in its statement, led to the hashtag #flutterwavescam trending on Twitter on Friday and Saturday in Nigeria.

  aghoghomena @obarhoro

  FLUTTERWAVE have conspired with Nigeria banks to reap innocent Nigerians of their hard earn money Please I'm are calling on the government and all concerned agency to ask Nigeria banks and flutterwave why they deny been hacked and keep oppressing innocent Nigerians with power

• Meanwhile, amidst the furor from those with funds frozen & others, media platforms reported that Flutterwave’s CEO bought a “luxurious” Miami beach home for $7.1M.

• And apparently, despite the hack that wasn’t, Flutterwave’s CEO quietly began leading an effort to tackle fraud in Nigerian fintech.

Ultimately, one wonders if the communications here could have been handled more effectively…

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🚀 Partnerships & Product Launches

LAUNCHES

• Telkom launched WhatsApp payments in South Africa powered by conversational commerce platform Clickatell. Telkom customers in the country can now pay phone bills and buy telco packages via WhatsApp using Clickatell’s Chat2Pay product. For more on Clickatell, see Week 8 2022’s Week in Review where its $91M Series C was the deal of the week.

• Banque du Caire launched its 99.99%-owned e-payments platform Taly in Egypt. Taly offers omnichannel payment acceptance and cash management solutions, real-time family card monitoring & control solutions, and buy-now-pay-later (BNPL) management solutions for banks and fintechs.

• Nigerian digital bank Kuda launched its SoftPOS product. Kuda Business users with NFC-enabled smartphone can now accept EMV card payments. For more on SoftPOS, see the article ‘SoftPOS is ready for prime time’ in Week 2 2023’s Fintech Review.