Flutterwave and OPay
A rough comparison to highlight potential value of Opera's stake in Opay.
Flutterwave has made a quite a flutter by raising 170M in Series C at a 1B+ valuation.
Lets compare flutterwave to Opay. Although this is not an apple to apple comparison as flutterwave operates in payment processing and Opay in mobile wallet/mobile money transfer.
Also, TAM for Opay has to be many multiples of TAM of flutterwave as Opay operates in Offline market as well in addition to online.
But lets do a comparison and see what value we can derive for Opay since Opay’s public valuation data is not available and it has not raised any new funding since it is growing profitably/breakeven.
Flutterwave
When the company raised its Series B, we reported that Flutterwave had processed 107 million transactions worth $5.4 billion. Right now, those numbers have increased to over 140 million transactions worth more than $9 billion. The company, which also helps businesses outside Africa to expand their operations on the continent, has an impressive clientele of international companies, including Booking.com, Flywire and Uber.
Opay - This begs the questions that what would be Opay worth in public market.
Based on this most recent announcement from Opera, Opay processed over 2B in transaction volume in Dec 2020 compared to 363m in Jan 2020 . A staggering 4.5 times growth. Compare that to flutterwave, which processed total of 9B in transaction since its founding in 2016.
When Opay did its last Series B funding round of 120m in 2019, it was valued around 500m and was doing around 10m in daily transaction volume ( $300M a month)
Now, Opay is doing 7 times of transaction volume compared to what it did when it last raised 120m at around 500m valuation. Also, they have reported that their revenue has also increased nicely and are operating at breakeven profit.
Flutterwave has processed 140m transactions since 2016 while Opay has processed at least 8 million transaction from offline from/to online aspect of their business.
if I were to assign a 15x-20x increase in valuation as the TPV increased by around 7x, with growing accelerating in 2020, and plans to launch additional markets and products in 2021, OPAY should be valued at around 7.5-10B billion.
Opera has 13% stake in Opay, so Opera stake could be worth around ~ 900M - 1.3B.
P.S :: This is back of napkin math just to highlight potential value/estimate of Opera’s stake in Opay just to show that how undervalued Opera’s stock is trading at 1.4B valuation as of this writing.
Source :
https://techcrunch.com/2020/01/21/african-fintech-firm-flutterwave-raises-35m-partners-with-worldpay/
https://techcrunch.com/2021/03/09/african-payments-company-flutterwave-raises-170m-now-valued-at-over-1b/
https://investor.opera.com/news-releases/news-release-details/operas-investment-opay-has-rapidly-become-leading-payments
https://techcabal.com/2021/03/02/opay-plans-to-amplify-impact-in-2021-by-expanding-agent-partner-networks-new-product-offerings/
https://techcabal.com/2021/01/07/opay-expansion-north-africa/
https://techcrunch.com/2019/11/17/operas-africa-fintech-startup-opay-gains-120m-from-chinese-investors/
https://www.crunchbase.com/organization/flutterwave/company_financials
Thanks.
What is your rationale for assigning the 15-20X?