Stripe has announced that it has agreed to acquire Paystack for $200 million, a Nigerian technology startup based in Lagos that makes it easy for organizations of all sizes to collect payments from around the world. Stripe is a global technology company headquartered in Silicon Valley that builds Fintech infrastructure and facilitates online payments for many online businesses.
According to Stripe, Paystack will be able to continue operating independently after the acquisition as it carries on in growing its operations across Africa. Eventually, the Silicon Valley Fintech company added, 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. 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," said Shola Akinlade, CEO and co-founder of Paystack.
History of collaboration between Stripe and Paystack
Stripe's acquisition of Paystack is not the first time that the two companies have crossed paths. Back in 2018, Stripe led a Series A funding round into Paystack valued at $8 million. Visa along with Tencent and Y Combinator also participated by providing follow-on funding.
The Series A funding round followed on from a $1,3 million seed funding round which Paystack secured in 2016. Both the funding rounds highlighted the rapid growth and traction that the Nigerian Fintech startup has been able to secure in a short period of years.
This rapid growth is also something that appears to have enticed Stripe to acquire Paystack.
“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. We can’t wait to see what they will build next and how their growth can turbocharge the African tech ecosystem," said Matt Henderson, Stripe’s business lead in EMEA.
Growth of Fintech across Africa
Over the past five years, the same period during which Paystack has experienced rapid growth, there has been a boom of both Fintech startups across Africa as well as the use of Fintech solutions by consumers.
This is reflected also in that Paystack reports that it currently more than 60,000 businesses in Nigeria and Ghana that use their solutions to collect online and offline payments among other things. Added to that, the Nigerian startup says it processes more than half of all online transactions in Nigeria.
Although both companies have confirmed the acquisitions, the transaction is subject to regulatory approval.
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