Venture Capital

Flutterwave Private Shares

Per the amended marketing rules adopted by the SEC, some investment details can only be shown to certain logged-in members.
Status

Waitlist open

Remaining

Accepting $20,000 - $500,000 investments

Have an account? Log in

Accepting $20,000 - $500,000 investments

Overview

Invest in a late-stage funding of Flutterwave, a payment processing software for merchants throughout Africa. Flutterwave has created an application programming interface (API) which enables merchants to seamlessly accept and send digital payments across a multitude of payment channels, currencies and payment types. Flutterwave is a highly valued “unicorn” startup backed by Visa, Mastercard and Greycroft among others.

Premise

Potential benefits of investing in late-stage private companies and this opportunity

  • Late stage VC companies can be less risky in comparison to companies undergoing early stage rounds of funding.
  • Private companies are typically undervalued compared to public market companies creating the potential for outsized returns.
  • Holding periods for late-stage VC assets tend to be relatively short compared to other private market strategies as their time to expected liquidity is shorter.
  • Private equity investments, including venture, have positive but lower correlation to public equity markets.
  • Access to Flutterwave was brought to Yieldstreet by Greycroft, an early-stage investor in Yieldstreet and Flutterwave.
  • Yieldstreet has invested directly in the preferred equity of Flutterwave.
  • The preferred shares have senior liquidation preference from the sale or liquidation proceeds received from the company in comparison to common equity shareholders.

According to Cambridge associates, allocating capital to VC backed companies has historically generated significant excess returns

  • VC backed companies play an important role in the next stage of the innovation life cycle.
  • During this private stage, companies typically see fast growth as their products and technology commercialize and allow for scale.
  • In many cases, the pandemic has accelerated the level of innovation and our reliance on technology and tech-enabled services, presenting numerous opportunities for astute investors.
  • According to Cambridge Associates, as of June 30, 2021, the USVC index generated a ten-year net IRR of 18.7%, and it registered a one-year net return of 88.1%
  • According to PitchBook, US VC-backed companies raised $329.9B in 2021, nearly double the previous record of $166.6B raised in 2020. The increase in deal count did not match the pace of the surge in additional capital, signaling the continuation of a trend of increased deal sizes.
  • According to Partech, $5.2 billion from 681 equity rounds was raised by African VC backed companies in 2021, up 264% from 2020 figures of $1.4B. The firm said the number of deals it recorded almost doubled, increasing 92% year-over-year from 359 deals in 2020.

Private companies are typically undervalued compared to public markets

  • Many private companies are historically valued less than their publicly traded peers due to many factors including the lack of liquidity.
  • Private company investors can receive equity valuations discounted from their public peers.
  • In 2021 public tech companies were valued 2.4x more than peer private companies, according to PitchBook and Capital IQ.
  • This gap can be closed for pre-IPO investors when private companies go public or become as large as their public peers.

Flutterwave has been funded by notable venture capital firms

  • Access to Flutterwave was brought to Yieldstreet by Greycroft, an early-stage investor in Yieldstreet and Flutterwave.
  • Greycroft may present opportunities for the Yieldstreet platform, giving its investors an opportunity to participate in established, private high-growth companies. Greycroft has previously invested in the Series A, B and C funding rounds of Flutterwave.
  • Late-stage venture investing gives a ‘sneak peak’ into the diligence efforts of experienced venture capitalists, allowing investors to benefit from years of knowledge and learnings.
  • Investors in earlier funding rounds continue to invest in later stage funding rounds of Flutterwave, which leads us to believe that the investment opportunity remains to be of high quality.
  • This Series D funding round has raised $250M, tripling the company’s valuation to over $3B in just 12 months.
  • Flutterwave’s total raise since its inception six years ago is $475 million.
  • Its latest backers in this Series D round include lead investor B Capital Group and participating investors Alta Park Capital, Whale Rock Capital, and Lux Capital. Existing investors such as Avenir Growth, Tiger Global, Glynn Capital, Green Visor and Salesforce Ventures also invested in this round.

Flutterwave has seen impressive growth since its Series C

  • Early stage companies may struggle for positive cash flows, capital to grow, market share gains and product acceptance, making them a highly speculative investment.
  • In contrast, late-stage investing in VC backed companies can reduce the risk of failure from pure start-ups by investing in growing companies that have weathered some of the most difficult parts of starting a company.
  • We believe Flutterwave’s 6-year track record demonstrates that the payments processor is no longer just a concept.
  • As a private company, detailed financials are not public but many industry metrics are available.
  • At $3B, Flutterwave is currently one of the highest valued African startup, surpassing the $2B valuation set by SoftBank-backed fintech OPay and FTX-backed cross-border payments platform Chipper Cash last year.
  • As of March 2021, Flutterwave had processed 140 million transactions worth over $9B and was used by 290,000 businesses.
  • As of March 2022, Flutterwave has an infrastructure reach across 34 countries and now processes 200 million transactions worth more than $16 billion, with more than 900,000 businesses globally utilizing its services.
  • Flutterwave processes payments in 150 currencies across different payment models: local and international cards, mobile wallets, bank transfers and its consumer product Barter (the African version of Venmo).

Flutterwave has a strong business model

  • One of Africa’s biggest payment processors by reach, enabling global/African merchants and consumers to transact domestically, regionally, and globally.
  • Until Flutterwave, the digital payment system across Africa was highly fragmented making it difficult for merchants to previously accept payments.
  • Since its creation, Flutterwave has unified payment methods, facilitated international business, enabled remittances & interconnectivity across borders, promoted financial inclusion and solved for one of the last available payments infrastructure frontiers in the world.
  • Flutterwave’s payment processing API replaces multiple payment integrations with one.

Investment strategy designed to offer attractive risk adjusted returns

  • Yieldstreet has invested directly in the preferred equity of Flutterwave.
  • Preferred equity shares were acquired via the most recent Series D funding round and via a secondary market acquisition of previously issued Series B shares.
  • Other investors in the Series D financing include venture firms Alta Park Capital, Whale Rock Capital, Lux Capital, Avenir Growth, Tiger Global, Glynn Capital, Green Visor and Salesforce Ventures.
  • The preferred shares have senior liquidation preference from the sale or liquidation proceeds received from the company in comparison to common equity shareholders.
  • The Series D round raised $250M and was led by B Capital Group.
  • The funds are to be used to support organic customer acquisitions growth through M&A, acquisition of firms with appropriate licenses in growth regions, accelerate customer acquisition in existing markets, facilitate market expansion and develop complementary products.
  • Given the later-stage round of funding, it is expected that Yieldstreet will remain an equity investor until a favorable liquidity event is possible.
  • A liquidity event could be an initial public listing (IPO), a Flutterwave equity buy-back, or secondary sale of the Fund’s position to another investor.

Essentials

Please refer to the Investment Memorandum in the Documents section for more details about this offering.

Accessibility

Who can invest?

  • The Fund allows investors to invest directly into a VC backed company that is traditionally offered with high minimums (typically $5M and up), and only to institutions, family offices, and ultra-high net worth individuals.
  • Eligible investors must verify that they are accredited investors and qualified clients. Please refer to the Private Placement Memorandum for more information.
  • This offering is not available to pension plans, defined benefit plans, defined contribution plans, retirement plans, IRAs, 401(k) and 403(b) funds, and funds composed of these plans and funds.

Cash flow

How do investors get paid?

  • There is no recurring current cash flow income projected by this investment.
  • Returns are expected to be achieved via capital appreciation at the time of exit.
  • Investors are expected to receive a target annualized return of 26%, net of the management fee, performance fees and other expenses as further described in the Private Placement Memorandum. Target returns are offered as opinion and are not referenced to past performance. Target returns are not guaranteed and results may differ materially.
  • After all principal is returned to investors, any excess returns will be split with investors (80%), Yieldstreet (5%) and Greycroft (15%). Please see the Private Placement Memorandum for more details.
  • There is no assurance the valuation of a future liquidity event will be lower, at, or higher than the original investment.

Returns & Management fees

Ann'l management fee

2%

Target ann'l net return

25%+

Target equity multiple

2.8X

Share in excess profits

80%

Incentive fee

20%

Schedule

Payment schedule

Event based

Target term

4 years

Structure

Tax document

K-1

Offering structure

SPV

Ann'l flat expense

0.5%

Slide 1 of 3
  • Returns & Management fees

    Ann'l management fee

    2%

    Target ann'l net return

    25%+

    Target equity multiple

    2.8X

    Share in excess profits

    80%

    Incentive fee

    20%

  • Schedule

    Payment schedule

    Event based

    Target term

    4 years

  • Structure

    Tax document

    K-1

    Offering structure

    SPV

    Ann'l flat expense

    0.5%

Docs

This offering page describes only certain aspects of the offering ("Offering") of the securities issued by YS VC GC I LLC ("Fund"). The Offering is made only by means of the Private Placement Memorandum dated April 12, 2022 relating to the Offering (the "PPM"). The information on this offering page is a summary of the Offering, does not purport to be complete and should not be considered a part of the PPM, or as incorporated in the PPM by reference or as forming the basis of the Offering. No person has been authorized to give any information or to make any representations other than those contained in the PPM or in any marketing or sales literature issued by the Fund or Yieldstreet Management, LLC, as adviser thereto, and referred to in the PPM, and, if given or made, such information or representations must not be relied upon. All investors must read the PPM in its entirety prior to investing in the securities.

Investing in private markets and alternatives, such as this offering, is speculative and involves a risk of loss, and those investors who cannot afford to lose their entire investment should not invest. Returns are not guaranteed.