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Thursday, May 30, 2024

Stripe acquires Nigeria’s Paystack for $200m

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Stripe is acquiring Paystack, a fintech company in Lagos, Nigeria which provides payment processing services for consumers and businesses.

The terms of the deal have not been disclosed but sources have said the deal is close to $200 million. Stripe had earlier invested in Paystack when they led an $8 million funding round in Paystack.

That makes this the biggest startup acquisition to date to come out of Nigeria, as well as Stripe’s biggest acquisition to date anywhere.

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.

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

Founded in 2015 by Shola Akinlade and Ezra Olubi, Paystack sought to solve the challenge of online payment transactions in Nigeria.

By seamlessly connecting all multi-channel payment options with merchants across the country, it enabled them to accept payments from around the world, via credit card, debit card, and direct bank transfer on web and mobile.

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