American financial service platform, Stripe, has acquired Paystack, one of Nigeria’s leading payment service providers.
Paystack provides a quick way to integrate payments services into an online or offline transaction by way of an application programming interface.
According to reports, the arrangement will see Paystack continue its operations independently with its large customer base which includes small businesses, larger corporates, fintechs, educational institutions, and online betting companies.
Although not all terms of the deal were made public, people privy with the discussions noted that it is worth over $200 million. This makes it the biggest startup acquisition out of Nigeria.
This will help expand the company’s footprint around the world and also set it up for a possible IPO in the future.
Speaking in an interview with Tech Crunch, Mr Patrick Collison, Stripe’s co-founder and CEO, said it was an enormous opportunity considering the future prospects of online commerce.
“In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow about 30 per cent 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,” he said.
On the part of Paystack, the deal will give the company an ability to build out further in Nigeria and expand to other markets, disclosed its CEO, Mr Shola Akinlade, in an interview.
“Paystack was not for sale when Stripe approached us. For us, it’s about the mission. I’m driven by the mission to accelerate payments on the continent, and I am convinced that Stripe will help us get there faster. It is a very natural move,” Mr Akinlade stated.
Stripe has made a number of investments into startups building technology or businesses in areas, including backing investment in universal checkout service, Fast, and backing the Philippines-based payment platform, PayMongo.
Both companies have a history with Stripe leading an $8 million funding round for Paystack, with others participating including Visa and Tencent in 2018.
Mr Collison said that while acquiring Paystack after investing in it was a big move for the company, people also shouldn’t read too much into it in terms of Stripe’s bigger acquisition policy.
“When we invest in startups, we’re not trying to tie them up with complicated strategic investments. We try to understand the broader ecosystem, and keep our eyes pointed outwards and see where we can help.”
This may mean that it has no plans to acquire other regional companies or other operations simply to expand Stripe’s footprint but how well it operates as in the case of Paystack.
“A lot of companies have been, let’s say, heavily influenced by Stripe but with Paystack, clearly they’ve put a lot of original thinking into how to do things better. There are some details of Stripe that we consider mistakes, but we can see that Paystack gets it, it’s clear from the site and from the product sensibilities, and that has nothing to do with them being in Africa or African.”
