Stripe has made a major market statement by making the move to acquire Paystack, “the Stripe for Africa,” at a sum of $200 million
Earlier on this year, Stripe raised $600 million and announced that it intended to expand its API-based payments services into more geographies and new markets, and now, the company is coming good on that promise in the form of some Mergers and Acquisitions.
Stripe has acquired a tech company, Paystack, which started in Lagos, Nigeria and had always referred to itself from inception as “the stripe for Africa.”
Paystack as at the time of its acquisition boosted 60,000 clients which encompasses small and medium sized businesses, larger corporates, fintechs, educational institutions and online betting companies. And even though it has been acquired by the bigger Stripe, the plan is for it to continue operating independently.
The $200 million acquisition deal makes this the biggest startup acquisition to date to come out of Nigeria, as well as Stripe’s biggest acquisition to date anywhere. (Sendwave, acquired by WorldRemit in a $500 million deal in August, is based out of Kenya.)
This move by Stripe is a significant statement by the company as it matures and seeks new opportunities. The company clearly recognizes that the African market is the place to be as such its acquisition of a similar business in the market, and none better than one that had already always described itself as “the strip for Africa.”
Speaking on this deal, Stripe’s Co-Founder and CEO said that, “There is enormous opportunity. In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow about 30% every year. And even with wider global declines, online shoppers are growing twice as fast. Stripe thinks on a longer time horizon than others because we are an infrastructure company. We are thinking of what the world will look like in 2040-2050.”
On Paystack’s end, the deal will provides the company a lot more firepower to build out further in Nigeria and also expand into other African markets.
“Paystack was not for sale when Stripe approached us,” company CEO, Shola Akinlade, who co-founded the company with Ezra Olubi (who is the CTO) said. “For us, it’s about the mission. I’m driven by the mission to accelerate payments on the continent, and I am convinced that Stripe will help us get there faster. It is a very natural move.”
Paystack had been on Stripe’s radar for some time prior to this deal. Like its U.S. counterpart, the Nigerian startup went through Y Combinator — that was in 2016. Paystack set the record as the first-ever startup out of Nigeria to get into the world-famous incubator. Later on in 2018, Stripe led an $8 million funding round for Paystack, other round participants were Visa and Tencent.
Random African loves writing about the African continent. He is consistently in touch with happenings in every part of the continent and derives joy from providing fresh and crisp information for his audience.