Fintech: Stripe Gets Its Hands On Nigerian Startup, Paystack
Oct 18 2020
Paystack, a Nigerian payments startup which has previously been referred to as the Stripe of Africa, has now been acquired by Stripe in a deal worth $200m.
The terms of the deal have not been disclosed but sources have said the deal is close to $200 million.
Five years later, the company has attracted a buyer who has seen the company's potential as it tries to expand into other regions of Africa.
It is for this reason that Paystack has been regularly nicknamed the "Stripe of Africa". Stripe is now valued at $36 billion.
Paystack is one of Nigeria's largest online and offline payment solution startups.
With their capabilities embedded in Stripe's Global Payments and Treasury Network (GPTN), Paystack will continue operating independently, growing their operations in Africa and adding more worldwide payment methods.
Speaking on the acquisition, Shola Akinlade, CEO and co-founder of Paystack revealed that they had no intention of selling the company when Stripe first approached them.
Stripe led an $8 million Series A funding round for Paystack in 2018 and has now chose to buy the Nigerian outfit to take advantage of a market that has huge potential, with online commerce on the continent growing at 21% year-over-year. The company has raised over US$10-million from both global and local investors including Stripe, Visa, Tencent, Y Combinator, Comcast Ventures Catalyst Fund, Blue Haven Ventures and Ventures Platform.
The amount of the deal - subject to standard closing conditions, including regulatory approvals - was not disclosed. I think we are trying to do the same thing. Help people start and scale internet businesses, increase the gross domestic product (GDP) of the internet.
The Africa opportunity is particularly attractive, with the continent's internet economy growing 21% YoY, 75% faster than the global average per Stripe.
The acquisition would allow organisations of all sizes to easily collect payments from around the world, the statement said.
However, co-founder John Collison recently dampened speculation about an imminent flotation when he said that the company's hiring of new chief financial officer Dhivya Suryadevara did not mean Stripe was preparing for an IPO.
Collison further noted that Stripe is planning for "a longer time horizon" than most other Fintech businesses.