Nathaniel Disu, dubbed “retired young and rich,” decoded financial advice and explained the recent value of the Flutter wave and the Paystack company-for-cash swap. He analyzed the obscurity on his personal Facebook account.
He writes,
So, few weeks ago, we got the news that Flutterwave had another seed funding (private investment) and is now valued at $3bn
It was a great news to Nigeria and the tech ecosystem
But, as always, some companies go collect “stray bullet”
Some folks were “dragging” Paystack and saying they sold too early
That they should have waited further
Here’s my view..
Paystack did the best thing by seling to Stripe
$250m is not small money
Cash at hand is better than anything in the world
It seems Nigerians don’t know much about valuation
Valuation is just “paper money”
It is “emotional money
Valuation simply means “this is what we feel this company is worth based on ABC and XYZ”
Valuation changes from time to time
That’s why you’ll hear that Elon Musk
made $40bn in 24 hours, or Dangote lost N300bn in 4 hours
Those monies gained or lost are not “actual cash”
They are money tied to shares of companies they own
And as share price fluctuate, their networth also fluctuates
A man can have a networth of $1bn and yet only have $500k in cash
That being said..
Let’s go back to Flutterwave and
Paystack…
Few years ago, Jumia had a market capitalisation of over $3bn on the US Stock Market
Today, Jumia’s valuation is a little above $80Om (they’re currently no longer a Unicorn)
So, despite Flutterwave being privately valued at $3bn, if they go public on the stock market, expect that valuation to change
And hey, I’m not saying Flutterwave isn’t a good company
I love Flutterwave and would invest in them if they go public
All I’m just saying is that, valuation from seed funding is different from stock market valuation
Overall, Paystack did the right thing selling their company
And also, Flutterwave is doing the right by still being private (for now)
Both are good for the tech ecosystem in Nigeria
It’s a WIN- WIN
#RetireYoungAnd Rich
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