But then, some of the world’s biggest technology companies followed the same pattern in their early years. They spent heavily first, built infrastructure, gained users, and then monetised at scale later.

That is why the move by Flutterwave is way more important than we speak about.

After processing over $40 billion in payments over the last decade, the company secured a Nigerian microfinance banking licence last month, following its acquisition of Mono, the open banking startup often described as Africa’s version of Plaid. 

This is bigger than another fintech expansion story. What Flutterwave has done is move from simply moving money to controlling more of the infrastructure behind the movement of money.

For years, Flutterwave operated between businesses and banks. Companies used their rails to collect payments, settle transactions and move funds across borders, but the actual deposits and core banking functions still depended on licensed banks. The company processed huge volumes, but part of the economics were elsewhere.

That structure is common in fintech. A startup may appear large from the outside because transaction volume is high, but volume does not automatically mean strong margins. 

Many financial technology firms spend years paying partners, covering compliance expenses, subsidising growth, expanding into new countries and building trust before the business model fully matures.

In simple terms, some businesses spend their early years building the road before they can charge properly for traffic.

Flutterwave’s banking licence changes that equation. The licence allows the company to hold deposits directly, offer accounts, expand lending and control settlement flows inside its own ecosystem rather than depending entirely on partner institutions. 

That may sound technical, but it changes the economics of the business in a big way.

Margins improve when a company owns more layers of its infrastructure. Costs that once went to third parties begin to stay within the system. Products become easier to bundle, data becomes more useful, lending becomes possible and customer retention becomes stronger.

This is why the Mono acquisition is also very important. Mono’s infrastructure gives Flutterwave stronger access to account connectivity, financial data, identity verification and repayment intelligence. 

That means the company is no longer thinking only about payment processing. Its focus is a future where payments, banking, verification, lending and financial data operate together.

And that transition explains a fact that many people ignore when discussing startups. Not every serious business is designed to become profitable immediately.

Some companies optimise for early profit, while others optimise for scale, distribution and infrastructure first.

If a company focuses too early on squeezing profit from every transaction, growth can slow down. Expansion becomes harder, product depth suffers and competitors with stronger infrastructure eventually overtake them.

This is especially true in Africa, where building financial infrastructure is far more expensive and fragmented than many outsiders realise.

A fintech operating across multiple African countries must navigate different currencies, regulators, banking systems, compliance standards and settlement structures. 

In many cases, the rails barely speak to one another efficiently. Building around those gaps costs money and takes time.

That is why many African startups spend years appearing “busy but unprofitable”. The asset being built is usually invisible at first.

Trust, distribution, licensing, compliance, partnerships, technical infrastructure, and customer behaviour take years to develop properly.

What investors and founders usually hope is that once those layers become strong enough, monetisation becomes easier and more durable.

Flutterwave now appears to be entering that phase, already managing payments for global brands including Uber and Netflix across Africa. But the bigger shift is gradually moving from being a payments processor to becoming a financial infrastructure company.

That changes who its competitors are and also changes how the company earns money.

A processor earns from transaction activity, while a financial ecosystem earns from multiple layers at once, including deposits, cards, settlements, lending, verification, subscriptions and embedded services. That is a very different business.

Of course, delayed profitability is not automatically a good sign. Some companies simply burn cash without building durable value. Scale alone is meaningless if the economics never improve.

But there is usually a visible pattern when infrastructure businesses begin to mature. They stop renting critical systems and start owning them.

That is what we see behind Flutterwave’s banking licence. For nearly ten years, the company helped businesses move money across Africa while relying heavily on external banking infrastructure. Now, it is beginning to own more of that infrastructure itself.

And in business, that is the point where the monetisation begins.

Speaking during an exclusive fireside chat titled ‘Beyond the Hype: What it really takes to build technology that scales in Africa,’ the serial entrepreneur and investor dismantled some of the most popular assumptions in African tech, challenging founders to rethink almost everything they believe about building technology on the continent, including the belief that scale begins with funding.

Aboyeji said that raising money is not the hardest part of building a technology company in Africa, and it may be the most overrated.

“When you want to build beyond the hype in the world that we live in today, you also have to build beyond Africa. So when you say what it takes to build technology companies that scale in Africa, that’s a very limiting title, because you should be thinking beyond Africa.”

For Iyinoluwa Aboyeji, who has co-founded Andela, Flutterwave, Moove and investment firm Future Africa, scale does not start with geography, pitch decks or capital. It starts with the biggest perspective most founders avoid. Companies that last are not built for locations. They are built for people.

“The most important thing any business needs is a unique understanding of its customers. Technology transcends more than geography, and it’s more adaptive to psychographics than it is to geography.”

This misunderstanding, he said, is why many founders begin by copying Silicon Valley playbooks rather than defining what technology can truly do for their customers.

“A lot of people start off trying to figure out what Silicon Valley is doing, and I’m going to just build the Nigerian version.”

That approach, he said, usually leads to companies that look successful on the surface and raise money, but it rarely builds companies that reach scale and serve millions.

“You can have a successful company, depending on how you measure success, by copying Silicon Valley, but in terms of scale, in terms of a product that goes deep into serving billions of customers, I’ve just never seen it work.”

The myth in African tech

Iyinoluwa Aboyeji repeatedly returned to what he described as the most damaging belief in the ecosystem. “The big myth that a lot of people have is that the most important thing you need for a startup is investment.”

Capital, he said, is not the foundation of scale. Customers are. “The most important thing any business needs is a unique understanding of their customer that is sufficiently differentiated from others, but comes from a place of real depth.”

He illustrated this with the origin of Moove, the mobility fintech he co-founded. The company started by addressing what seemed to be a Lagos problem, where drivers needed cars but could not afford to buy them.

“What we didn’t realise was psychographic about that was that the problem of drivers without cars is a global problem.”

The insight became clear once the team stopped viewing the issue as local. “You go to London, all those drivers don’t own the cars they’re driving. You go to Dubai, Germany. When you break out of your geographic and demographic barrier, and you start going into the psychographic world, you’re going to unlock products that are global by nature.”

Why product–market fit is rare

Asked how founders should think about product–market fit, Aboyeji dismissed the way the term is usually used. “You have to have an obsession with your customers. When I say obsession, I don’t mean it lightly.”

As an investor, he said his firm reviews thousands of pitch decks but stops only when something genuinely unfamiliar appears. “We only stop to look when we see something that we’ve not seen before.”

He used a portfolio company, Filmmaker Smart, as an example, whose founding idea went against the dominant thinking in Africa’s creative economy.

“Their core thesis was that nobody needs a movie studio. It’s too expensive and it doesn’t fit the way film is made in Africa.”

At the time, the idea sounded unreasonable. Today, the company is backed by IFC and Sony, generates six- and seven-figure revenues annually, and is used by major studios.

“Somebody who understands a customer understands how to reimagine a world that they need to live in.”

Teams fail before products do

On building teams, Aboyeji spoke about where many founders go wrong. “I see a lot of people spend a lot of equity and money hiring engineers that don’t actually know anything about their markets.”

Skill alone, he said, is not enough.

“If the person who’s actually going to be touching the product and building the product doesn’t have insight, you’re actually better off just using a contracting agency.”

What matters most, especially for co-founders, is commitment. “Passion is actually a Greek word that means something you’re willing to suffer for.”

He warned founders against carrying unwilling partners or begging co-founders to work. “If the moment you’re working with somebody who doesn’t feel a need to sacrifice, just know you’re alone.”

The cost of taking bold steps

Reflecting on his own “big bold step,” Iyinoluwa Aboyeji pointed to his decision to leave Andela at a time when the startup had Mark Zuckerberg as an investor and was already a large, successful business.

“I could have just stayed there, but I wouldn’t be a three-time founder if I didn’t make that move.”

The move to Flutterwave came with no safety net. “That entire first year there was no salary. I was borrowing money from my wife. That was my girlfriend.”

He described weekly flights between Lagos and San Francisco, sleeping on planes, and working across continents simply to keep the company alive.

Starting again, he said, has since become second nature.

On failure

Iyinoluwa Aboyeji addressed failure without trying to soften it. “The definite outcome of every startup is death.” What separates founders, he argued, is how they treat that reality. “There was a business that failed. It wasn’t you.”

He shared stories of early ventures that collapsed, near expulsion from university, and pivots that only worked after initial ideas failed. “Every company you see failed its way to becoming successful.”

The one thing founders must stop doing

During the rapid-fire round at the Conference, Aboyeji was asked what founders must stop doing if they want to succeed.

“Raising money.”

He explained why. “Because customers are how you get money. Capital is customers.” 

Partaining the future, his outlook was: “African talent will dominate artificial intelligence.”

“Stop copying, stop chasing investors, understand customers deeply, and accept failure as part of the work.”

Venture capital into African tech started to decline after 2022, forcing founders to ask if it was better to sell to consumers who can’t spend, or sell tools to the businesses that still can.

The economics of a difficult choice

I used to think consumer-first was the fast lane, but not anymore. Today, more costs of customer-acquisition, shrinking disposable incomes and selective VC chequebooks mean the logic of “growth at all costs” is a gift very few Nigerian founders can afford.

Recent industry reviews show venture capital flows into African tech softened over the years, with total African tech VC around $2.2 billion in 2024, a pullback in deals and more picky investing. Funders are backing fewer startups and favouring those with clear unit economics. 

So founders face a practical choice to keep focusing on individual consumer startups, and highly expensive attention, or pivot to B2B, embedded finance and infrastructure, where unit economics are clearer and customers (businesses) have repeatable budgets.

The B2C problem: why many consumer startups are burning out

Consumer startups in Nigeria are facing three structural challenges at once:

1. Higher customer-acquisition costs (CAC). Because everyone’s vying for clicks and impressions, the cost of customer acquisition has ballooned. Digital ad marketplaces are commoditised and pricey; getting someone’s first purchase now costs far more than it did in 2019–21. Benchmarks show CAC increasing across channels as competition for attention also increases. When you’re paying heavily just to get someone to try your app, your ROI horizon stretches uncomfortably long.
2. Squeezed spending power. Inflation has battered households. Nigeria’s headline inflation eased to 18.02% in September 2025, down from 20.12% in August, the sixth straight month of deceleration. But even at 18%, people are prioritising food, rent, transport, discretionary spends suffer.
3. Funding winter and selective capital. In tough times, VCs favour capital efficiency over growth stories. The IFC reports that venture funding across Africa has shifted toward startups with stronger unit economics and clearer paths to cashflow. 

So consumers have to prove real retention, strong margins and defensibility.

Why B2B (and embedded-finance) looks safer right now

If B2C is the high-variance play, B2B is the steady hand. Here’s why:

• Lower CAC per dollar of revenue. Selling to a business usually requires a longer sales process, but the ticket sizes are higher and the lifetime value is more predictable. When the numbers line up, monthly recurring revenue (MRR) beats one-off consumer spend every time.
• Clearer ROI for customers. Businesses pay for cost savings, compliance, productivity profits or revenue enablement. Those returns are easier to quantify, so you can price accordingly.
• Embedded finance & infrastructure scale. When you integrate payments, credit, or financial tools into business workflows, you capture value across transactions. Fintech firms embedding services into merchant flows or enterprise stacks are winning in this period.
• Reduced churn risk. Consumers abandon services quickly when times are hard. Businesses, even the informal ones, and especially those tied into operations, tend to stick unless value disappears.

In short, B2B gives you fewer customers, but each one is more likely to stick and to pay.

Hybrid doesn’t mean compromise: the smartest founders don’t treat this as binary

It’s not B2C or B2B, it’s how smart founders mix them.

The most resilient startups are those that:

• Build an infrastructure layer (payments, logistics, procurement) that serves businesses, and then expose consumer-facing products on top; or
• Start as B2C but quickly develop monetisable B2B channels (merchant tools, analytics, advertising for retailers); or
• Market directly to small businesses (MSMEs) that both buy and sell to consumers, a customer group with recurring cash flow. That’s monetising through cross-sell, e.g. merchant tools, data analytics, credit, even if the front door is consumer-facing.

In Nigeria, the informal economy, shops, kiosks, and traders, accounts for a huge share of activity. Moniepoint’s Informal Economy Report shows that 85% of informal businesses are sole proprietorships and only 40% employ labour; they buy goods via transfers and remain cash-heavy but represent concentrated purchasing power in local markets. 

Startups that serve these businesses indirectly serve consumers, while enjoying steadier revenues.

The founder’s checklist: questions you should ask now

If I were advising a founder deciding between consumer startups (B2C) or B2B today, I’d insist on answers to these:

• Can you prove payback in less than 12 months without heavy subsidy? If not, think twice about continuing consumer-first growth spend. If your cost to acquire a user is more than their lifetime value, you have a problem.
• Does your customer have a predictable spend line you can influence? Businesses that buy monthly or seasonally are better customers than an unstable consumer base.
• Is your product infrastructure-led? If others can replicate your consumer UI, you’ll be permanently on the defensive. The more you embed into workflows (payments, data, finance), the stickier your products become.
• Can you monetise through multiple channels? Can you diversify your revenue streams? Merchant fees, data services, and B2B subscriptions diversify risk. Don’t depend only on subscriptions or single product lines.

If you can’t answer them confidently, you risk building a house on sinking sand. In this market, metrics (downloads, DAU) are not a strategy.

Practical plays that work (examples and tactics)

Here are tactics I’ve seen succeed in Nigeria and across Africa:

• Merchant-first payments: Begin with payments or checkout solutions for small businesses, then layer credit, procurement, and analytics on top.
• Vertical SaaS + embedded payments: If you serve a vertical (e.g., agri-traders, clinics), embed payments, insurance and credit inside the software. You capture more of the value chain.
• Cost-reduction products: Logistics optimisation, energy-efficiency tools, inventory finance including products that reduce OPEX for clients are easier to sell in tight times.
• Anchor clients, then scale: Land a few enterprise contracts to validate your model, then expand horizontally.

These are high-leverage moves. They may require more sales tactics early, but bring more reward over time.

Where I’d put my chips now

If I were placing chips today, I’d lean into B2B and hybrid models while keeping a careful consumer startups arm alive for brand depth. The consumer market is fractured, loyalty is weak, attention is expensive, and regressions are common.

But businesses will always need tools, margin relief, and financial products. If you build what they can’t easily do without, you win.

So yes, B2C (consumer startups) is very much alive, but in this season of limitations, B2B is safer. And the hybrids? They’re the ones who will tell who thrives next.

I smiled, but inwardly, I winced.

It wasn’t the confidence that bothered me, it was the maths. The kind of maths that turns startup founders into debtors. Because behind every vanity metric is a hard truth. And here’s one that’s difficult to ignore:

90% of startups fail.

Nearly half collapse because they misread market demand. Not because they didn’t dream big. Not because their logo wasn’t trendy. But because they didn’t understand what the numbers were really saying.

At a stage where global venture funding dropped to $66.5 billion in Q3 2024, the lowest in three years, investors are buying proof, not dreams and visions. And if your startup can’t show that it earns more than it spends, you’re not in the game. You’re in a countdown.

Welcome to the end of “burn and brag.” Welcome to the new economy: earn, or exit.

Understanding the Core: What Unit Economics Actually Means

Let’s not get tangled in complex languages. Unit economics is just a way of asking two questions:

1. How much does it cost you to get one customer?
   (That’s Customer Acquisition Cost — CAC)
2. How much money will that customer bring you over their lifetime?
   (That’s Lifetime Value — LTV)

If your CAC is ₦15,000 and your LTV is ₦10,000, then congratulations, you’re spending ₦5,000 to lose a customer. Multiply that by 1,000 users and you’re running a charity, not a business.

Many Nigerian startups are walking this road. High marketing costs, weak retention, and poor product-market fit stretch CAC to breaking point. Meanwhile, LTV is crushed by churn, pricing issues, or over-reliance on freemium models that never convert.

Startups that fail to balance CAC and LTV almost always struggle with long-term profitability. And in this funding space, that’s beyond a delay; we can call it a death sentence.

The Collapse of “Grow Now, Monetise Later”

This model worked… once. A few years ago, if you showed rapid user growth, VCs would line up to invest. Profits? Not urgent. Just promise them a hockey stick graph and expansion plans into six African countries.

But the tide has turned.

Global venture capitalists are careful.
Investors are tired of exits that never come.
Unicorns are being questioned.

There are 1,565 unicorns globally. Many of them are now being pressured by investors to justify their lofty valuations. Some are laying off staff. Others are “restructuring”, a polite word for panic.

We’ve also seen this locally. Think about 54gene. It raised millions, expanded fast, then imploded. Why? Not just market challenges. They scaled before they nailed their business model.

And as Sequoia Capital said, “The market isn’t rewarding growth at all costs like it did in years past.”

“Companies who move the quickest have the most runway and are most likely to avoid the death spiral.”

“Hope for the best, but prepare for the worst.”

How to Fix Your Unit Economics Before it Kills Your Startup

The transition to solid economics is painful, yes. But it’s necessary. Here’s how founders can stop losing it:

1. Lower Your CAC, or Die Trying

Stop throwing money at ads that don’t convert. Referral systems, partnerships, community-led growth; these are more efficient. Know what works. Kill what doesn’t.

2. Increase LTV by Solving Actual Problems

If customers drop off after one month, your product has no stickiness. Improve value. Add retention features. Make people need you, not just try you.

3. Watch Your Margins Like a Hawk

What does it really cost you to deliver the product? If your margins are thin, scale makes it worse, not better.

4. Track Payback Period Relentlessly

How fast do you recover CAC? If it takes two years, you’re burning runway on wishful thinking.

5. Kill the Ego Metrics

Downloads, followers, media features; none of these pay salaries. Focus on revenue, retention, and repeatability.

We can’t keep building business models that need ₦1 billion in marketing to make ₦500 million in revenue.

Scale is a Privilege, Not a Right

Scaling isn’t a goal. It’s a reward for getting the fundamentals right.

A product that works in Yaba won’t magically work in Nairobi or Accra. Not if you’ve skipped the hard work of validating value. When you scale a broken business model, you scale the loss. Ask any founder who expanded too soon.

Y Combinator once warned, 

“Make something people want.”

“Stay lean and iterate fast.”

“Survival is the first priority.”

What Investors are Really Looking for Now

Startups that survive the next phase will be the ones who stop performing for investors and start performing for customers.

Investors today want:

• Positive contribution margins
• Clear LTV > CAC ratios
• 18 to 24 months of runway
• Evidence of product-market fit before scale

And here’s the irony: Only 18% of first-time founders succeed. Those with one failed company under their belt? 20% success rate. Failure educates. But why not skip the tuition fees by learning what matters now?

The Future is More Focused

The focus on unit economics is not the end of ambition. It’s the start of maturity. Investors are not rejecting innovation, it’s the waste they are rejecting.

We’re moving towards a startup ecosystem that prioritises fundamentals over fireworks. I welcome it.

If you’re a founder, it’s time to stop asking, “How do I raise my next round?”
Start asking, “How do I make this business make sense, without burning everything?”

Because in this new normal, burning money is not commended, it can be reckless. Profitability is not old-fashioned; it’s the future.

And for startups in Nigeria, where capital is scarce and unpredictability is plenty, understanding and acting on your unit economics is indispensable, not optional.

However, alongside their pursuit of success, startups must also address ethical considerations and embrace social responsibility. Here, we will focus on the significance of ethical practices in startups, highlighting three critical areas: data privacy, diversity and inclusion, and sustainability. 

1. Data Privacy: Safeguarding Confidentiality and Trust

In an increasingly digital world, data privacy is a paramount ethical concern for startups. Companies that handle customer data must prioritize the protection of personal information and comply with relevant privacy laws and regulations. Failing to establish robust data privacy measures can lead to severe consequences, including breaches, reputational damage, and legal liabilities.

Startups should implement the following practices to uphold data privacy:

a) Transparent Data Collection: Startups must clearly communicate their data collection practices and obtain explicit consent from individuals. Openness regarding the purpose, scope, and storage of data helps build trust and demonstrates a commitment to privacy.

b) Secure Data Storage: Employing strong cybersecurity measures is crucial for protecting sensitive data. Startups should invest in encryption, firewalls, and regular security audits to safeguard against unauthorized access or data breaches.

c) Responsible Data Usage: Startups should only collect and retain data that is necessary for their operations and ensure it is used for legitimate purposes. They must avoid selling or sharing customer data without explicit consent, promoting responsible data usage and protecting individuals’ privacy rights.

2. Diversity and Inclusion: Fostering Innovation and Empathy

Building a diverse and inclusive startup culture goes beyond meeting social and legal obligations. It promotes creativity, drives innovation, and helps organizations better understand and serve their diverse customer base. By embracing diversity, startups can access a wider range of perspectives, experiences, and talents, leading to better decision-making and problem-solving.

Key steps to fostering diversity and inclusion in startups include:

a) Creating an Inclusive Environment: Startups should establish policies that ensure equal opportunities and fair treatment for all employees. Implementing diversity training programs, promoting open dialogue, and addressing unconscious biases are essential to creating an inclusive workplace culture.

b) Diverse Hiring Practices: Startups should adopt strategies to attract and hire candidates from diverse backgrounds. Employing diverse recruitment channels, implementing blind resume screening, and actively seeking out underrepresented talent help eliminate biases and increase the diversity of the workforce.

c) Inclusive Product Design: Startups should develop products and services that cater to diverse customer needs. Involving diverse teams in the product development process ensures that a wider range of perspectives are considered, leading to more inclusive and user-friendly solutions.

3. Sustainability: Balancing Profits and Environmental Impact

With increasing global awareness of climate change and environmental degradation, startups must embrace sustainable practices. By prioritizing sustainability, startups can minimize their ecological footprint, reduce waste, and contribute positively to the communities they operate in. Sustainable practices not only benefit the environment but also enhance a startup’s reputation and appeal to conscious consumers.

Startups can adopt the following measures to promote sustainability:

a) Environmental Impact Assessment: Startups should conduct a thorough assessment of their operations to identify areas where environmental impact can be minimized. This includes reducing energy consumption, managing waste effectively, and choosing sustainable suppliers.

b) Responsible Supply Chain: Startups should work closely with their suppliers to ensure ethical and sustainable practices throughout the supply chain. This includes selecting suppliers with strong environmental credentials and promoting fair labor practices.

c) Social Impact Initiatives: Startups can engage in social initiatives and contribute to the communities they serve. This may involve supporting local environmental projects, participating in charitable activities, or implementing programs that address social issues such as poverty, education, or healthcare.

d) Sustainable Innovation: Startups have the opportunity to develop innovative solutions that address environmental challenges. By integrating sustainability into their core products or services, startups can provide value to customers while minimizing negative environmental impacts.

e) Transparent Reporting: Startups should communicate their sustainability efforts transparently to stakeholders. By publishing sustainability reports and disclosing key metrics, startups can be held accountable for their environmental initiatives and progress.

Conclusion

In the ever-evolving startup ecosystem, ethical considerations and social responsibility are integral to long-term success and positive societal impact. Leveraging these ethical practices will not only mitigate risks but also create opportunities for innovation, collaboration, and sustainable growth.

As startups continue to shape the future, integrating ethics and social responsibility into their DNA is a crucial step towards building a more inclusive, responsible, and sustainable business landscape.