Nigerian Payments Startup, Paystack, Acquired by US Tech Giant, Stripe in a Deal Worth Over $200 million
Paystack, a leading payments startup in Nigeria, has been acquired by US-based financial services and software company, Stripe, in a deal reportedly worth more than $200 million. This is the biggest M&A deal in the Nigerian tech industry and one of the biggest in Nigerian corporate history. Through the acquisition, Stripe is stepping up its expansion into Africa.
Read Also: Obinna Ukwuani Appointed Chief Digital Officer, Bank of Kigali, Rwanda
Founded in 2015, Paystack is headed by Shola Akinlade who is the Chief Executive Officer of the firm, and Ezra Olubi, the Chief Technology Officer who founded the company after identifying a gap in the transactions between merchants and consumers. With Paystack, users can pay with local and international cards, or directly from their bank accounts. Paystack also supports localized payment channels, including mobile money, QR code, and USSD payments.
In 2016, Paystack became the first startup from Nigeria to join the Y Combinator accelerator program. Two years after its launch, the company processed 15% of all online payments in Nigeria.
Like Stripe, Paystack provides APIs that let merchants, with just a few lines of code, build online payment features. Therefore, over 60,000 businesses in Nigeria and Ghana use Paystack to make online and offline payments. The team has developed APIs enabling developers to create online custom checkout experiences, build automated recurring billing systems, instantly send bulk transfers to any bank account in Nigeria, and verify the identity of customers.
Already processing more than half of all online transactions in Nigeria, the company is planning to expand across the continent. Paystack currently operates in Nigeria and Ghana. However, the company has started partnering with businesses in South Africa.
Stripe, on the other hand, led an $8 million Series A funding round for Paystack in 2018. The company decided to buy Paystack to take advantage of a market that has huge potential, with online commerce on the continent growing at 21% year-over-year.
However, Paystack will continue to operate independently. Over time, its capabilities will be embedded in Stripe’s programmable platform for the global money movement that currently spans 42 countries.
Matt Henderson, business lead, Emea, Stripe, says:
“In just five years, Paystack has done what many companies could not achieve in decades. Their tech-first approach, values, and ambition greatly align with our own. This acquisition will give Paystack resources to develop new products, support more businesses, and consolidate the hyper-fragmented African payments market.”
Shola Akinlade, CEO, Paystack, adds:
“We believe deeply that with the right tools, African creators, developers, and entrepreneurs can do incredible things. Leveraging Stripe’s resources and deep expertise, we’re excited to accelerate our geographic expansion and introduce more payment channels, more value-added services, and deeper integrations with global platforms.”
Nigerian Payments Startup, Paystack, Acquired by US Tech Giant, Stripe in a Deal Worth Over $200 million