In buying Paystack, the Collison brothers’ Stripe cast its eye on the next big frontier for digital commerce: Africa.

Stripe’s acquisition of Paystack for more than an estimated $200m will make online and offline payments easier for African businesses and enable more global companies to sell in the region.

Paystack is a start-up based in Lagos, Nigeria, and like Stripe makes it quicker and easier to integrate payments services into online or offline transactions.

“In just five years, Paystack has done what many companies could not achieve in decades”

The Nigerian company currently has around 60,000 customers, including small firms, large corporates, fintech, education institutions and more.

According to Stripe the African internet economy is expanding quickly, with online commerce in the region growing 21pc year-over-year, 75pc faster than the global average.

Paystack already processes more than half of all online transactions in Nigeria. Paystack has ambitious plans to expand across the continent and recently started a pilot with businesses in South Africa.

Turbo-charging the African tech ecosystem

Stripe and Paystack have been working closely together for some time. In 2018, Stripe led Paystack’s Series A financing round and has provided ongoing guidance as the company rapidly scaled.

“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,” said Matt Henderson, Stripe’s business lead in EMEA.

“This acquisition will give Paystack resources to develop new products, support more businesses and consolidate the hyper-fragmented African payments market. We can’t wait to see what they will build next and how their growth can turbocharge the African tech ecosystem.”

Paystack will continue to operate independently, growing their operations in Africa and adding more international payment methods. Over time, Paystack’s capabilities will be embedded in Stripe’s Global Payments and Treasury Network (GPTN), a programmable platform for global money movement that currently 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 Shola Akinlade, CEO and co-founder of Paystack.

“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.”

It emerged recently that Stripe, which was founded by two Irish brothers Patrick and John Collison, is now worth $36bn after raising $600m in a Series G round.

Stripe was founded in San Francisco 2009 when CEO Patrick Collison was just 22 and his brother John was 19. Prior that the brothers who hail from Nenagh but as teenagers living in Limerick established a start-up in 2007 called Shuppa that later became known as Auctomatic. They sold Auctomatic for $5m when they were just 19 and 17 respectively.

By John Kennedy (john.kennedy3@boi.com)

Published: 15 October, 2020

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