Nigerian fintech company Paystack Lands Milestone Deal-By Drive Africa

Nigerian fintech company Paystack has been on a growth path and become an important player in country’s fast growing fintech and payments market. The company which was founded in 2015 by Ezra Olubi and Shola Akinlade has recently been acquired the San Francisco based payments giant Stripe, in a deal which as announced in October and which industry insiders estimate to have been over $200 million.  The two companies are expected to operate independently under the deal. The deal is reportedly the largest acquisition of a start up in Nigeria as well as the largest by Stripe.  Paystack, which is led by Shola Akinlade as its CEO, was the first start up in Nigeria to be accepted in the U.S. based incubator, Y Combinator.  

Image Credit: Paystack

Paystack provides an API based payments service which gives users and businesses the ability to accept and make payments digitally. Paystack has grown to become a leading payments processing company with a 60,000 user base consisting of organizations from across the public and private sectors as well as Small and Medium Enterprises (SMEs). Paystack, which as workforce of over 100, reportedly processes over 50% of Nigeria’s online payments. The company has ventured beyond its home market of Nigeria and ventured into Ghana and South Africa, where it has been conducting pilots of its products. The acquisition by Stripe, is part of the company’s strategy to expand its operations on the African continent. The transaction is part of a growing trend of innovative African startups mobilizing capital and investments from international investors and players. Stripe was an early investor in Paystack having raised participated in Paystack’s Series A round of $8 million.  The company also had an array of early investors which included Ingressive Capital and Ventures Platform.

Image Credit: Paystack

African fintech startups have recently attracted interest from global players such as Tecent, MasterCard, PayPal, Y Combinator, and Visa among others.  This trend has been particularly prominent within the fintech and technology sectors.  In August of 2020 for instance, World Remit made a $500 million dollar acquisition of Kenya’s Sendwave.  In 2019 African tech startups raised about $1 billion.

Stripe, which has a valuation of over $30 billion and a growing footprint of over 17 countries, is betting big on it international expansion, seeking opportunities in emerging markets such as those in Africa. The company’s has a client list which features companies such as global technology titans like Google, Amazon, and Zoom. The company is taking a long term view in looking at opportunities on the continent where it expects e-commerce to continue to grow. To finance its own international expansion, Stipe has mobilized $600 million.