• Saturday, December 09, 2023
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Flutterwave allegations: How Uber overcame the Kalanick palaver

Flutterwave: When corporate governance saved or ruined tech startups

Uber may not be a core payment company like Flutterwave, but it shares some similarities with the Nigerian-founded company.

Firstly, the ride-hailing company which was founded in 2009 grew to become the most valuable startup in the world valued at $51 billion after its funding rounds in July 2015. Flutterwave, founded in 2016, is presently the most valuable tech company in Africa with a valuation of $3 billion after a $250 million funding round in 2022. Both companies achieved the feats in about 6 years of being set.

Secondly, Uber once had to battle about every kind of scandal possible in today’s tech industry: privacy invasions, sexual harassment, mistreatment of gig workers, a toxic bro culture, intellectual property lawsuits. In the middle of the allegations was Uber’s CEO and co-founder, Travis Kalanick.

Olugbenga Agboola, the current CEO and founder of Flutterwave is the subject of allegations ranging from harassment, insider trading, creating a fictitious co-founder, getting multiple sexual favours from colleagues using his position, lying under oat to the US Securities and Exchange Commission among others.

While Flutterwave’s troubles may have begun with a LinkedIn post made by a former female employee, Clara Odero alleging harassment, it was a searing article authored by David Hundeyin, a Nigerian investigative journalist that seems to have hit home. Uber’s troubles also began when a female employee outed the company for its sexist culture in a 3000-word blog post. Following the post were many more revelations including a video of the CEO having a heated argument with an Uber driver on pricing. There was also a story in The New York Times that accused Uber of spying on competitors and deliberately trying to deceive regulators.

Although Flutterwave has yet to officially release a statement, the allegations are a big dark blot on a pristine reputation of the poster child of the burgeoning tech ecosystem in Africa. Iyinoluwa Aboyeji, a former CEO and co-founder who was mentioned in the Hundeyin article has since attempted to refute some of the claims made.

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However, in an interview he granted TechCabal, he may have all but confirmed the fictitious co-founder allegation as well as an allegation that he was abruptly forced to step down from Flutterwave.

“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. After a while, it became clear what had happened.” Aboyeji told TechCabal.

Aboyeji who was also accused of colluding with Agboola to lie to the SEC, said the allegation was “patently false and deeply unfair.”

Many experts however say the admissions do not help the case of Agboola and causes further reputational damage for the brand Flutterwave.

The reputational damage does not also help the company’s ambitions of becoming a listed company in the near future, a position where Uber found itself in the wake of the scandal involving their CEO.

What did Uber do in the case of Kalanick?

The first thing was the board and investors of Uber taking precise action to stem the tide and stop the ship from sinking further.

In a letter titled “Moving Uber Forward” and obtained by The New York Times, the investors wrote to Kalanick that he must immediately leave and that the company needed a change in leadership.

After Kalanick’s ouster, the new CEO had a mandate to move Uber beyond Kalanick’s legacy. The former CEO was reputed to have favoured building Uber by any means necessary. Kalanick aggressively turned the company into the world’s dominant ride-hailing service and upended the transportation industry around the globe. That aggressiveness came at the cost of eroded culture bringing Uber’s brand to disrepute.

Hence, Dara Khosrowshahi the new CEO worked hard to move beyond Kalanick’s legacy, doing away with his predecessor’s 14 company tenets, replacing principles such as “super pumped” and “always be hustlin’” with credos such as “we do the right thing” and “we persevere.”

In December 2019, Kalanick said that he has sold off all his Uber stock — estimated at more than $2.5 billion — and is resigning from the board of directors, severing ties to the company he co-founded.

Uber went ahead to list on the New York Stock Exchange (NYSE) and the jury is still out on whether it was the best decision for Kalanick to completely sever ties with the company he helped to build. One thing the response of Uber investors and board achieved was to detach Uber’s future from Kalanick’s legacies.

BusinessDay understands that Flutterwave is preparing an elaborate response to the allegations, how it learns from the lessons of Uber will determine whether the company’s dream of IPO is realised quickly or postponed perhaps indefinitely.