Stripe is acquiring Paystack to expand fintech services in Africa

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Members of Paystack's team. Image: Paystack

The acquisition, which is reportedly worth more than $200m, will allow Stripe to expand into the African payments market.

Today (15 October), fintech business Stripe announced plans to acquire Nigerian payments start-up Paystack. The two companies have been working closely for some time, with Stripe leading Paystack’s Series A funding round in 2018 and providing the Nigerian start-up with ongoing guidance as it scales its business in Africa.

Founded by Ezra Olubi and Shola Akinlade in Lagos in 2015, Paystack enables businesses to accept payments via credit card, debit card, money transfer and mobile money through their websites or mobile apps.

The start-up currently has 60,000 customers in Nigeria and Ghana, including both small and large businesses, fintechs, educational institutions and online betting companies. Under the terms of the acquisition, Paystack will continue to operate independently.

‘Turbocharge the African tech ecosystem’

Matt Henderson, Stripe’s business lead in EMEA, said: “In just five years, Paystack has done what many companies could not achieve in decades. Their tech-first approach, values and ambition greatly align with our own.

“This acquisition will give Paystack resources to develop new products, support more businesses and consolidate the hyper-fragmented African payments market.”

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While terms of the deal were not disclosed by Stripe, sources told TechCrunch that it is worth more than $200m. This would make it the biggest start-up acquisition ever in Nigeria and one of Stripe’s largest acquisitions to date.

While announcing the news, Stripe outlined the growing internet economy in Africa. It said that online commerce in the region is increasing 21pc year-on-year, at a rate that is 75pc faster than the global average.

While Paystack’s existing customer base is based in Nigeria and Ghana, the start-up plans to expand across the continent and it has recently started a pilot with businesses in South Africa. Over time, Paystack will embed its capabilities in Stripe’s global payments and treasury network, which is a programmable platform for global money movement that currently spans 42 countries.

“We can’t wait to see what they will build next and how their growth can turbocharge the African tech ecosystem,” Henderson added.

Akinlade, who is chief executive of Paystack, commented: “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.

“We believe deeply that with the right tools, African creators, developers and entrepreneurs can do incredible things. Leveraging Stripe’s resources and deep expertise, we’re excited to accelerate our geographic expansion and introduce more payment channels, more value-added services and deeper integrations with global platforms.”

Kelly Earley is a journalist with Siliconrepublic.com

editorial@siliconrepublic.com