Nigeria has been encouraging its most valuable startup, Flutterwave, to consider listing on the Nigerian Exchange (NGX) to boost the country’s capital markets. However, due to Flutterwave’s current lack of profitability, the strict rules of the NGX that require listed companies to be profitable, and concerns about the exchange’s ability to provide the necessary liquidity for global investors, the likelihood of Flutterwave listing solely on the NGX seems slim.
Flutterwave, valued at $3 billion, would be a significant player on the NGX if it were to go public. Unlike other listed companies like MTN Nigeria and Dangote Cement, Flutterwave is currently not profitable, which could pose a challenge in meeting the NGX’s listing requirements.
While Nigeria has been actively promoting Flutterwave’s listing on the NGX, Flutterwave has been cautious in its public statements and has not committed to an IPO. The government’s efforts to persuade Flutterwave to list locally intensified after discussions at the G20 summit in India.
The NGX has previously struggled to attract tech startups, with only a few showing interest in listing. The exchange aims to appeal to younger retail investors with high-growth stocks like Flutterwave, but the company’s focus on rapid scale rather than profitability may not align with the NGX’s requirements.
The liquidity challenge is a significant concern for both Flutterwave and potential investors, as the NGX’s market may not have the capacity to support a high-growth fintech stock like Flutterwave. This challenge has deterred other Nigerian startups from listing on the exchange as well.
Overall, while there is interest in having Flutterwave as a flagship tech listing on the NGX, the exchange’s limitations in providing the necessary liquidity may push Flutterwave to explore other listing options outside Nigeria.