Africa’s largest fintech firm, Flutterwave, has acquired Nigerian open banking startup Mono in an all-stock deal valued between $25 million and $40 million, based on folks aware of the transaction.
The acquisition brings collectively two of Africa’s main fintech infrastructure corporations. Flutterwave operates one of many continent’s widest funds networks, whereas Mono, usually described because the “Plaid for Africa,” has constructed APIs that enable companies to entry financial institution knowledge, provoke funds, and confirm clients.
Mono has raised about $17.5 million from traders, together with Tiger World, Basic Catalyst, and Goal World. Sources near the deal mentioned the acquisition allowed all its traders to no less than recoup their capital, with some early backers realizing returns of as much as 20x. Mono will proceed to function as an impartial product, the businesses mentioned in an announcement.
Based in 2020, Mono, like Plaid, makes use of APIs that enable customers to consent to sharing their financial institution info, enabling monetary establishments to research revenue, spending patterns, and reimbursement capability.
The corporate addresses the lack of standardized access to bank data across African markets, the place credit score bureaus stay restricted and fintechs, particularly lenders, usually depend on clients’ financial institution transaction histories to evaluate creditworthiness.
In accordance with CEO Abdulhamid Hassan, practically all Nigerian digital lenders now depend on Mono’s infrastructure. The corporate claims to have powered greater than 8 million checking account linkages, protecting roughly 12% of Nigeria’s banked inhabitants. It additionally claims to have delivered 100 billion monetary knowledge factors to lending corporations and processed thousands and thousands in direct financial institution funds. Prospects embrace Visa-backed Moniepoint and GIC-backed PalmPay.
For Flutterwave, which powers native and cross-border funds throughout greater than 30 African international locations, the deal deepens its vertical integration. Along with funds, the corporate can now supply onboarding and identification checks, checking account verification, data-driven threat evaluation, and one-time or recurring financial institution funds inside a single stack.
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Flutterwave CEO Olugbenga ‘GB’ Agboola framed the acquisition as a guess on Africa’s subsequent part of fintech progress. “Funds, knowledge, and belief can’t exist in silos,” he mentioned. “Open banking supplies the connective tissue, and Mono has constructed crucial infrastructure on this area.”
Hassan echoed that view, arguing that Africa is getting into a credit-driven part as governments throughout the continent push lending-led monetary inclusion initiatives. That transition relies on each substantial knowledge infrastructure and regulatory confidence, significantly in markets like Nigeria, the place open banking frameworks are nonetheless evolving.
“If the economic system goes to be credit-driven, you want deep knowledge intelligence to understand how folks earn and spend,” Hassan mentioned. “However on the similar time, for open banking to essentially work, regulators should be assured that buyer funds are secure.”
In opposition to that backdrop, becoming a member of Flutterwave positions Mono to scale rapidly as soon as regulatory limitations fall. Flutterwave already operates throughout dozens of African markets, with native licenses, enterprise clients, and compliance groups in place.
“This enables us to develop what’s attainable for companies working throughout African markets whereas staying grounded in safety, compliance, and native relevance,” Agboola mentioned.
The transaction mirrors earlier consolidation makes an attempt in world fintech infrastructure, together with Visa’s failed acquisition of Plaid in 2020, which was blocked by U.S. regulators. Hassan cited that deal as proof that combining knowledge infrastructure with cost rails can unlock scale.
Each Y Combinator-backed corporations rely Tiger World (which was the lead investor in Flutterwave’s Series C and Mono’s Series A) amongst their backers. Hassan mentioned, nevertheless, that the agency didn’t facilitate the transaction. As a substitute, the deal grew out of a longstanding working relationship between the 2 corporations, which had partnered on a number of financial institution cost merchandise over time.
That collaboration performed out towards an open banking panorama that has modified considerably over the previous 5 years.
When Mono launched, it confronted competitors from corporations similar to Base10 Companions-backed Okra and Ribbit Capital-backed Sew. Since then, Mono has emerged as a number one participant within the area, following Okra’s shutdown and Sew’s pivot towards a deeper funds ecosystem play that has allowed it to raise significantly more capital.
Addressing Mono’s monetary place forward of the acquisition, Hassan mentioned the corporate, which, based on Pitchbook, raised $15 million in Series A at a $50 million post-money valuation in 2021, was not compelled right into a sale to Flutterwave and is on monitor towards profitability this 12 months. With vital money reserves, he added, elevating one other spherical would have launched new valuation and progress expectations in a troublesome funding setting.
Nonetheless, past the 2 corporations concerned, the transaction — much like the consolidation between South African fintechs Lesaka and Adumo — indicators a broader inflection level for African fintech, the place startups that after aspired to develop into standalone giants might more and more discover higher outcomes by integrating into scaled platforms.
