The Lagos, Nigeria-based fintech firm Paystack, which offers API-based payment services for businesses, has been acquired by Stripe, a giant Silicon Valley payments firm with similar services in the U.S.
Founded in 2015 by Shola Akinlade and Ezra Olubi, Paystack was the first Nigerian-based company to be accepted into Silicon Valley accelerator Y Combinator. It also expanded into South Africa and Ghana and has 114 employees, Quartz Africa reported.
Paystack claims to have 60,000 customers, according to TechCrunch. These include small businesses, larger corporations, financial tech firms, educational institutions and online betting companies. The plan will be for Paystack to continue operating independently, the companies said.
“Five years ago, we set out with the audacious goal to build a ‘Stripe for Africa’ and we literally became Stripe, for Africa!” Ezra ‘God’ Olubi tweeted.
Sources have valued the deal at $200 million-plus, although an official statement on the numbers hasn’t been made by either company.
The acquisition is the biggest for Stripe and the Nigeria-based company. Stripe had previously stated that it wanted to expand into Africa and its acquisition of Paystack makes good on that goal.
In April 2020, Stripe announced a new $600 million funding round that bumped its valuation to $36 billion, the company told CNBC.
“There is enormous opportunity,” Stripe co-founder and CEO Patrick Collison told TechCrunch. “In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow about 30 percent 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.”
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Stripe was initially an investor in Paystack when it raised $8 million in funding in 2018. However, company representatives said people shouldn’t think if Stripe invests in a company that it means the company wants to acquire it. Collison credits Paystack’s ingenuity of original ideas as the main reason for the acquisition.
“A lot of companies have been, let’s say, heavily influenced by Stripe,” Collison said. “But with Paystack, clearly they’ve put a lot of original thinking into how to do things better. There are some details of Stripe that we consider mistakes, but we can see that Paystack ‘gets it.’ It’s clear from the site and from the product sensibilities, and that has nothing to do with them being in Africa or African.”
News of the acquisition comes amid #EndSARS protests against police brutality in Nigeria, which mirror the call to defund the police in the U.S.
Paystack shared the “positive news” of the acquisition on Twitter.
“In the midst of a tough week in Nigeria, we have some positive news to share. Paystack will be acquired by @stripe to accelerate online and offline commerce across Africa,” they wrote.
Paystack assured customers there wouldn’t be a disruption of business, just an improvement. The company also used the platform to call attention to the “peaceful protests.”
“Paystack will continue to operate independently and there will be no disruption of service. With Stripe’s support and expertise, we will provide deeper integrations with global platforms and accelerate our geographic expansion,” Paystack tweeted.
