Fakoyejo OlalekanNigerian unicorn, Flutterwave, is in talks to acquire UK fintech, Railsr, which is struggling to raise funds from Venture Capitalists.
Railsr, formerly called Railsbank, was founded by Nigel Verdon and Clive Mitchell in 2016. The financial technology company makes financial products and services digital and embeddable.
According to a report, Railsr is reportedly experiencing venture capitalists pull back from its fundraising round. Although the last fund the company raised was $46 million on October 4, 2022, from a Series C round.
The company has raised a total of $187.3 million from 28 investors, who will be bought out by Flutterwave, as the Nigerian fintech firm looks to expand inorganically.
Prior to the acquisition talks with Flutterwave, Railsr had also acquired startup, Wirecard Card Solutions, on August 28, 2020. Two years later, it is also up for sale.
Ventura Capital and Anthos Capital are the most recent investors of Railsr, which has a $20 million debt and a valuation of $250 million despite talks of the firm closing in on a unicorn status in 2022.
A spokesperson in Railsr had admitted to AltFi that the company is facing a difficult time. It was also reported that the UK fintech is experiencing cash flow issues.
The acquisition talks come almost a year after Flutterwave founder and CEO Olugbenga Agboola said: “We plan to grow inorganically through acquisitions, and it will happen when we find a fit and see a company with the same core values or culture and goal of making payments simpler across emerging markets. So we still have plans for that.”
Meanwhile, it was learnt that Railsr didn’t actually raise the total $46 million as reported by the company, as investors were wary of the firm’s valuation and growth prospects.
It was disclosed that the claimed $46 million was split into $26 million of equity from Anthos Capital and $20 million debt from Mars Capital.
Aside from financial issues tied to the company, it was also reported that Railsr is facing layoff amid the merger or acquisition talks with Flutterwave.
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