Nigerian payments startup, Paystack has been acquired by US-based payments giant, Stripe. According to a source, this deal is rumoured to be around $200 million.
For many in the Nigerian tech ecosystem, it was just a matter of time before this happened.
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.
This got the one-year old startup into US-based seed stage accelerator, Y Combinator where it received $120k in funding and access to global investors.
Later that year, it raised a seed funding of $1.3 million from Tencent, Comcast Ventures, Michael Seibel, Singularity Investments among other investors.
But it was in 2018 Paystack put everyone on notice as it raised $8 million in Series A funding. With participation from global payments company, Visa, US-based accelerator, Y Combinator, and Tencent, it was Stripe, a similar payments company based in the US, who led the round.
Three years after launching, this brought the company’s total funding to a little over $10 million. And since then, the company hasn’t raised a follow-up round.
So far, Paystack now has more than 60,000 customers using its platform and is looking to expand beyond Nigeria and Ghana where it currently operates.
Stripe, on the other hand, raised $600m earlier this year in April and according to the founders, the company was looking to continue investing in product development, further global expansion and strategic initiatives.
The billion-dollar startup has been strategically investing in similar startups around the world. Having invested in Paystack (Africa) two years ago, it invested in Paymongo, a payments startup in the Phillipines (Asia).
For it’s global expansion into Africa, Paystack presented the perfect opportunity. But while this is the biggest acquisition deal to come out of sub-Saharan Africa, both companies might continue to operate independently according to our source.