African Payments Giant Flutterwave Vies to Buy British Fintech Railsr
Despite the tough environment for fintech funding, Flutterwave and a network of existing Railsr shareholders are battling to acquire the British company.
Railsr – which was previously known as Railsbank – is fielding offers from potential buyers including Flutterwave, which has attracted a multi-billion-dollar valuation.
A prominent British fintech is in talks with rival suitors including Africa’s largest payments technology company about a sale that would take place at a steep discount to an earlier funding round.
Sources said that a consortium comprising a number of existing Railsr investors was also vying to acquire the company, which specializes in so-called embedded finance solutions such as banking services, credit cards and digital wallets.
One insider said there was “heavy competition for the asset”. News of the rival offers for Railsr comes as expectations grow of a wave of consolidation in the fintech sector as companies struggle to access sufficient standalone funding to survive
Late last year, Railsr itself raised a bridge funding round which was designed to provide enough capital to see it through to a sale. The timing and outcome of the ongoing sale process were unclear. For several months, Railsr has been working with bankers at FT Partners on a range of strategic options including an outright sale.
Last autumn, the company announced the completion of a $46m Series C funding round, although it did not publicly disclose that this took place at a valuation of about $250m – well below that of earlier fundraising.
Having snapped up assets from the collapsed German company Wirecard, Railsr has itself been on the acquisition trail. Last year, it secured a coup when it named Rick Haythornthwaite, the former chairman of MasterCard and current chair of Ocado and the AA, as its chairman.
Recently, and in common with many tech peers, it has made an unspecified number of staff redundant.
Nigel Verdon, Railsr’s founder, previously claimed that the company is “transforming the finance industry in the same way that Apple did to the music industry when they created iTunes”.
Railsr has raised well over $100m in equity funding, with backing from investors including Visa. Railsr declined to comment.