US e-payments firm Stripe has ventured into Africa’s e-commerce market by acquiring Nigerian startup firm Paystack. Located in Lagos, Paystack provides payment processing services for consumers and businesses based in Nigeria and Ghana.
“The African internet economy is expanding quickly, with online commerce in the region growing 21% year-over-year, 75% faster than the global average,” Stripe said in a statement. “In order to help increase Africa’s online GDP, Stripe has entered into an agreement to acquire Paystack, a technology company based in Lagos that makes it easy for organizations of all sizes to collect payments from around the world.”
The acquisition is the culmination of a close partnership between Stripe and Paystack over the last few years. Both companies are alums of the Y Combinator accelerator program, and Stripe led Paystack’s Series A round of funding in 2018.
Paystack provides payment services to 60,000 businesses in Nigeria and Ghana, including FedEx, UPS, MTN, the Lagos Internal Revenue Service, and AXA Mansard. The company already processes more than half of all online transactions in Nigeria and is aiming to expand to other African countries.
“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,” said Matt Henderson, Stripe’s business lead in Europe, Middle East and Africa (EMEA).
“We can’t wait to see what they will build next and how their growth can turbocharge the African tech ecosystem,” Henderson.
The terms of the deal were not disclosed but according to Techcrunch, the purchase price is over $200 million. Paystack will continue to operate independently and over time, it will be embedded in Stripe’s Global Payments and Treasury Network a programmable platform for global money movement that currently spans 42 countries, Stripe said.
Shola Akinlade, CEO and co-founder of Paystack said his firm was excited about the deal as it has potential for growth. “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,” he said.
The Silicon Valley Company is valued at $36 million, according to PitchBook, an investor website. Global brands such as Amazon, Google, Shopify, and Zoom – use Stripe’s software to accept payments and scale their online businesses. Around 80 percent of Americans adults reportedly complete a purchase using Stripe.
Paystack, based in Nigeria’s Lago state, was set up in 2016 by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi. They got funding from Silicon Valley’s Y Combinator accelerator program.
Paystack provides services to over 60,000 companies of all sizes. It is a PCI DSS Level 1 Certified, the most stringent level of certification in the global payments industry, enabling companies to transact across Africa safely and securely.