Stripe acquires Nigerian start-up Paystack for more than $200m
Company led by Patrick and John Collison previously led $8m investment in Paystack
Stripe co-founder John Collison pictured with Paystack co-founder and chief executive Shola Akinlade
The company, founded by Limerick-born brothers Patrick and John Collison a decade ago, led an $8 million Series A founding round for Paystack two years ago.
No financial details relating to the deal have been disclosed although TechCrunch valued the acquisition at over $200 million (€ 171 million).
Founded by Shola Akinlade and Ezra Olubi in Lagos in January 2016, Paystack has developed technology that lets businesses accept payments via credit card, debit card, money transfer and mobile money on their websites or mobile apps. The company employs more than 100 people.
Through Paystack’s’s payments interface, customers can pay with local and international cards, or directly from their bank accounts. Paystack also supports localised payment channels, including mobile money, QR code and USSD payments. Every payment is screened by fraud-monitoring systems to protect merchants from chargebacks, and Paystack’s direct bank integrations ensure high transaction success rates.
Paystack’s suite, which includes collections, disbursements, identity verification, reporting and commerce tools, is used by 60,000 businesses across Nigeria and Ghana. The company, which processes more than half of all online transactions in Nigeria, has also just started a pilot in South Africa and is eyeing a move into other countries.
Stripe said it is to provide additional resources to accelerate Paystack’s expansion plans in Africa, with the start-up to continue as a standalone business. Over time, it is expected to contribute to Stripe’s global payments and treasury network, which spans 42 countries.
“Paystack is a growth engine for modern businesses in Africa, and we couldn’t be more excited to join forces with Stripe, whose mission and values are so aligned with ours, to nurture transformative businesses on the continent,” said Mr Akinlade.
According to Stripe, the African internet economy is growing quickly, with the volume of online commerce in the region increasing 21 per cent year-on-year, 75 per cent faster than the global average. While Africa represents 17 per cent of the world’s population today, it accounts for only 2 per cent of its online commerce currently.
“This acquisition will give Paystack resources to develop new products, support more businesses and consolidate the hyper-fragmented African payments market,” said Matt Henderson, Stripe’s business lead in Europe, the Middle East and Africa (EMEA).
“We simply can’t wait to see what they will build next and how their growth can turbocharge the African tech ecosystem,” he added.
The deal for Paystack represents Stripe’s biggest acquisition to date.
Stripe, which was valued at nearly $36 billion after raising an additional $600 million from backers earlier this year, was founded by the Collison brothers in 2010. It employs more than 2,800 people globally, including about 300 in Ireland.
The company has been ramping up its investment in promising start-ups of late, recently participating in big funding rounds for US data interchange company Stedi and for the Pilippines-headquartered online payment platform, PayMongo.
Last year, it acquired Irish start-up, Touchtech Payments for an undisclosed sum.
Other investments include backing digital challenger bank Monzo, and partaking in a $22.5 million funding round for Step, a mobile banking start-up aimed at teenagers, last year.