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Stripe reportedly acquires Nigeria’s fintech startup, Paystack, for $200m

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PayStack Nigeria

Stripe is reportedly acquiring Paystack, an e-payment startup based in Lagos, Nigeria for a whopping sum of $200million.

According to the TechCrunch report, the acquisition is part of Stripe’s plan to navigate into Africa.

Paystack and Stripe share similarities such as the provision of a quick way to integrate payments services into an online or offline transaction by way of an API.

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.

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.

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“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.)

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Source: TechCrunch.

@TechEconomyNG connects past-present-emerging technological impacts on Businesses, People and Cities. All Correspondence to: [email protected]

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