Why Stripe Is Buying Nigeria-Based Paystack

By Amit Chowdhry ● October 19, 2020
  • Online payments platform company Stripe recently announced it is buying Lagos, Nigeria-based Paystack. These are the details.

Online payments platform company Stripe recently announced it is buying Lagos, Nigeria-based Paystack. Paystack is also known for offering an easy way to integrate payments services into online and offline transactions through APIs. This is why it is known as “the Stripe of Africa.”

Currently, Paystack has about 60,000 customers and the company is expected to continue operating independently following the acquisition. Paystack already processes over half of all online transactions in Nigeria. The terms of the deal were undisclosed, but sources with TechCrunch said that the deal was valued at more than $200 million. This is one of the largest technology Nigeria-based startup acquisitions so far.

And Stripe is one of the most valuable private technology startups right now at $36 billion and $1.6 billion in funding. Stripe is going to be one of the most-highly anticipated IPOs when that happens. But as of right now, Stripe has no plans to go public.

Online commerce in Africa is growing 21% year-over-year. This means it is growing 75% faster than the global average.

This is not the first time that Stripe made a deal with Paystack. Stripe led Paystack’s Series A financing round in 2018 and it provided guidance as the company was rapidly scaling.

KEY QUOTES:

“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.”

— Matt Henderson, Stripe’s business lead in EMEA

“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.”

— Shola Akinlade, CEO and co-founder of Paystack

“There is enormous opportunity. In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow about 30% every year. And even with wider global declines, online shoppers are growing twice as fast. Stripe thinks on a longer time horizon than others because we are an infrastructure company. We are thinking of what the world will look like in 2040-2050.”

— Stripe’s co-founder and CEO Patrick Collison in an interview with TechCrunch