Nigeria fintech startup, Paystack has been acquired by US-based payments giant, Stripe.
Stripe acquires Paystack, an API-based service that provides a quick and secure way to integrate payment services into an online or offline transaction. The startup, popularly referred to as ‘the Stripe of Africa’, was founded in 2015 by Shola Akinlabi and Ezra Olubi.
Paystack has grown over the years since its inception and the startup has come a long way to gaining a significant number of customers in Nigeria and Ghana estimated to be around 60,000. Small businesses, online betting companies, fintech, and large corporates all make use of paystack.
According to Techcrunch, terms of the deal are not being disclosed, but sources close to the companies confirm that it is over $200million, making Paystack’s acquisition to be the biggest startup acquisition so far in Nigeria as well as Stripe’s biggest acquisition. It will see both companies continue to operate independently.
Stripe, now valued at $36billion and regularly tipped as an IPO, founded by Patrick and John Collison is used by different companies including Amazon, Google, Shopify, and Zoom to accept payments and scale their online businesses. Earlier this year, it was made known that Stripe had generated another $600million in funding, with the wider geographical expansion of its API based payments services as a major reason for the funding which they are currently doing with the acquisition of Paystack.
In an interview with CNBC television, Patrick Collison, Stripe’s co-founder and CEO cited the massive growth in internet and smartphone users as one of the reasons for betting on the emerging markets of Africa. “Because we are an infrastructure company, we look at longer-term time risings,” he said, “nothing radical happens in infrastructure overnight and as we look at the world in 2025, 2030, 2040 it is so obvious that Africa is going to be such a significant part of the years and decades ahead”, he continued.
For Paystack, it means more empowerment to build progressively in Nigeria and expand further. “Both companies are really aligned, I think we are trying to do the same thing, help people start and scale internet businesses, increase the GDP of the internet,” said Shola Akinlade, the CEO of Paystack.
These companies have a history together. In 2018, Stripe led an $8million Series A financing round for Paystack. Both companies are also alums of the Y combinatory accelerator program. Paystack was the first-ever startup out of Nigeria to get into the world-famous incubator.
The hope is that this acquisition will pave the way for more exits in Nigeria’s growing startup industry. “If one of the most sophisticated companies in Silicon Valley can acquire a company from our ecosystem, it is just going to unlock a lot of opportunities. This is going to tell people that you can make things and it can work, you can build your dreams and you can get it done”. Shola Akinlabi said.