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Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa - Business - Nairaland

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Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by plat0: 3:46pm On Oct 15
When Stripe announced earlier this year that it had picked up another $600 million in funding, it said one big reason for the funding was to expand its API-based payments services into more geographies. Today the company is coming good on that plan in the form of some M&A.

Stripe is acquiring Paystack, a startup out of Lagos, Nigeria that, like Stripe, provides a quick way to integrate payments services into an online or offline transaction by way of an API. (We and others have referred to it in the past as “the Stripe of Africa.”)

Paystack currently has around 60,000 customers, including small businesses, larger corporates, fintechs, educational institutions, and online betting companies, and the plan will be for it to continue operating independently, the companies said.

Terms of the deal are not being disclosed but sources close to it confirm that it’s over $200 million. That 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.)

It’s also a notable shift in Stripe’s strategy as it continues to mature: typically, it has only acquired smaller companies to expand its technology stack, rather than its global footprint.

The deal underscores two interesting points about Stripe, now valued at $36 billion and regularly tipped as an IPO candidate (note: it has never commented on those plans up to now). First is how it is doubling down on geographic expansion: even before this news, it had added 17 more countries to its platform in the last 18 months, along with progressive feature expansion. And second is how Stripe is putting a bet on the emerging markets of Africa specifically in the future of its own growth.

“There is enormous opportunity,” said Patrick Collison, Stripe’s co-founder and CEO, in an interview with TechCrunch. “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.”

For Paystack, the deal will give the company a lot more fuel (that is, investment) to build out further in Nigeria and expand to other markets, CEO Shola Akinlade said in an interview.

“Paystack was not for sale when Stripe approached us,” said Akinlade, who co-founded the company with Ezra Olubi (who is the CTO). “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 acquiring it. Like its US counterpart, the Nigerian startup went through Y Combinator — that was in 2016, and it was actually the first-ever startup out of Nigeria to get into the world-famous incubator. Then, in 2018, Stripe led an $8 million funding round for Paystack, with others participating including Visa and Tencent. (And for the record, Akinlade said that Visa and Tencent had not also approached it for acquisition. Both have been regular investors in startups on the continent.)

In the last several years, Stripe has made a number of investments into startups building technology or businesses in areas where Stripe has yet to move. This year, those investments have included backing an investment in universal checkout service Fast, and backing the Philippines-based payment platform PayMongo.

Collison said that while acquiring Paystack after investing in it was a big move for the company, people also shouldn’t read too much into it in terms of Stripe’s bigger acquisition policy.

“When we invest in startups we’re not trying to tie them up with complicated strategic investments,” Collison said. “We try to understand the broader ecosystem, and keep our eyes pointed outwards and see where we can help.”

That is to say, there are no plans to acquire other regional companies or other operations simply to expand Stripe’s footprint, with the interest in Paystack being about how well they’d built the company, not just where they are located.

“A lot of companies have been, let’s say, heavily influenced by Stripe,” Collison said, raising his eyebrows a little. “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.”

Stripe, with its business firmly in the world of digital transactions, already has a strong line in the detection and prevention of fraud and other financial crimes. It has developed an extensive platform of fraud protection tools, but even with that incidents can slip through the cracks. Just last month, Stripe was ordered to pay $120,000 in a case in Massachusetts after failing to protect users in a $15 million cryptocurrency scam.

Now, bringing on a business from Nigeria could give the company a different kind of risk exposure. Nigeria is the biggest economy in Africa, but it is also one of the more corrupt on the continent, according to research from Transparency International.

And related to that, it also has a very contentious approach to law and order. Nigeria has been embroiled in protests in the last week with demonstrators calling for the disbanding of the country’s Special Anti-Robbery Squad, after multiple accusations of brutality, including extrajudicial killings, extortion and torture. In fact, Stripe and Paystack postponed the original announcement in part because of the current situation in the country.

But while those troubles continue to be worked through (and hopefully eventually resolved, by way of government reform in response to demonstrators’ demands), Paystack’s acquisition is a notable foil to those themes. It points to how talented people in the region are identifying problems in the market and building technology to help fix them, as a way of improving how people can transact, and in turn, economic outcomes more generally.

The company got its start back when Akinlade, for fun (!) built a quick way of integrating a card transaction into a web page, and it was the simplicity of how it worked that spurred him and his co-founder to think of how to develop that into something others could use. That became the germination of the idea that eventually landed them at YC and in the scope of Stripe.

“We’re still very early in the Paystack payments ecosystem, which is super broken,” said Akinlade. The company today provides a payments API, and it makes revenue every time a transaction is made using it. He wouldn’t talk about what else is on Paystack’s radar, but when you consider Stripe’s own product trajectory as a template, there is a wide range of accounting, fraud, card, cash advance and other services to meet business needs that could be built around that to expand the business. “Most of what we will be building in Africa has not been built yet.”

Last month, at Disrupt, we interviewed another successful entrepreneur in the country, Tunde Kehinde, who wisely noted that more exits of promising startups — either by going public or getting acquired — will help lift up the whole ecosystem. In that regard, Stripe’s move is a vote of confidence not just for the potential of the region, but for those putting in the efforts to build tech and continue improving outcomes for everyone.
https://techcrunch.com/2020/10/15/stripe-acquires-nigerias-paystack-for-200m-to-expand-into-the-african-continent/

35 Likes 3 Shares

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by sylve11: 3:48pm On Oct 15
Over $200m. That's some massive funds. Congrats man! cool

78 Likes 3 Shares

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by southniyikaye(m): 3:56pm On Oct 15
One of my regrets in life, rejecting computer science for biosystems engineering..
Shey now, me self for dey create apps worth millions of dollars

Modified - - - -una go Everly get issue with my personal regrets and decisions..
As I dey regret am now, he give una headache? Na your regret? Na my mistake? abeg let me regret my regret in peace biko

100 Likes 7 Shares

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by Luftwaffe(f): 4:04pm On Oct 15
southniyikaye:
One of my regrets in life, rejecting computer science for biosystems engineering..
Shey now, me self for dey create apps worth millions of dollars

What is stopping you from creating renewable/green energy that can benefit the world with what you studied? Mr. Excuses. Ojukokoro ontop another man sweat.

163 Likes 13 Shares

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by fasho01(m): 4:05pm On Oct 15
Good good good

3 Likes

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by BruncleZuma: 4:05pm On Oct 15

72 Likes 3 Shares

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by Tekecoms1(m): 4:05pm On Oct 15
V
Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by halmat(m): 4:05pm On Oct 15
Tech: The next oil

7 Likes 1 Share

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by MikeMicheal(m): 4:05pm On Oct 15
MAKES ME WONDER HOW MUCH PAYPAL WILL BE WORTH
Financial web services and ICT seems to be the new blood money.

18 Likes 2 Shares

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by HIbreed(m): 4:06pm On Oct 15
Good deal for paystack. Strive obviously overpaid for a Nigerian startup with a meagree 60,000 customersp
Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by cdm4live: 4:06pm On Oct 15
Good deal.
Just look at how technology is making people rich.

Buy this quality shoe for yourself or your boyfriend. Grab it for a giveaway price.

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2 Likes 1 Share

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by IceLip: 4:06pm On Oct 15
Congrat Maan!!


..what can i Start to do(tech) now, to be of benefit to the people, in 2021-2030 ??

4 Likes 3 Shares

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by AllOfUsAtManna(f): 4:06pm On Oct 15
good news

They should give us full stripe capabilities oo
make dem no do like PayPal that just added Nigeria just for adding sake that even ordinary Niger Republic and Lesotho has better functional features than Nigeria

21 Likes 1 Share

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by Parko(m): 4:06pm On Oct 15
Wow

1 Like

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by NLPsychologist: 4:06pm On Oct 15
outstanding!

1 Like 1 Share

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by Incandescent(m): 4:06pm On Oct 15
We are getting there
Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by royalads: 4:06pm On Oct 15
This is very good. Congrats to 'Ezra' and co. 4 to 5 of these kinda deals and our Ecosystem is set to blow. To think that the dude 'Ezra' achieved this with his dreadlocks, tattoos and what not.

To every young person reading this: dream it, believe it, work for it and you will get it.

40 Likes 2 Shares

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by JokeAdeleke: 4:06pm On Oct 15
Nice
Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by nextBIGthing: 4:06pm On Oct 15
This is massive mehn ..... This is to show the government we are not lazy ...they should create policies that’ll favor the youths

So many people got idea / innovation but no one to sponsor and even the government no help matter and its dying with them

I have a good business idea �
Dm if you want to be part of it

4 Likes 2 Shares

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by Cladez(m): 4:06pm On Oct 15
Wow that's some massive dough right there..

$200m definitely is X10 more than the amount he used in setting up paystack.

5 Likes 1 Share

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by vixpal: 4:06pm On Oct 15
Yoruba, making Nigeria Proud

17 Likes 3 Shares

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by Amspecial: 4:07pm On Oct 15
grin
Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by olaric(m): 4:07pm On Oct 15
Hope the police won't come for the guy on the left because he's got dreadlocks? I mean our policemen need serious orientation.

9 Likes 1 Share

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by Kzinne: 4:07pm On Oct 15
,
Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by Donkenny511(m): 4:07pm On Oct 15
Abeg money too dey online for those wey sabi

10 Likes 1 Share

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by Johnmax95: 4:07pm On Oct 15
grin this is good news . Smaller startup firms will gain exposure soon.


I will design a business website for 9,500 only. This covers hosting, domain name & emails.
Call/whatsapp 0802,860,9484

1 Like 1 Share

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by MintedWords: 4:07pm On Oct 15
Now these innocent looking geniuses would have been tagged "yahoo boys" and possibly killed by our bleeping SARS niggis...

In fact, #EndSARS × 100%

50 Likes 6 Shares

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by southniyikaye(m): 4:07pm On Oct 15
Luftwaffe:


What is stopping you from creating renewable/green energy that can benefit the world using what you studied? Mr. Excuses. Ojukokoro ontop another man sweat.
we all make naive decisions when we were younger... We study what they want us to study but not what we wanted to study...
If you get sense, you should've been able to deduce sense from my post

10 Likes 1 Share

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by Johnmax95: 4:07pm On Oct 15
sad
Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by kingmurainah(m): 4:07pm On Oct 15
Era of oil is completely gone, tech guys are the current and future Billionaires

20 Likes 2 Shares

Re: Stripe Acquires Nigeria’s Paystack For $200 Million To Expand Into Africa by densiks: 4:08pm On Oct 15
Many rounds of applause.

6 Likes 1 Share

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