Paystack Is The Most Successful Nigerian Tech Startup On Large Value Creation For Investors
TECH DIGEST – Paystack raised a total of $11.7 million and exited at more than $200 million to Stripe . This could be one of the most successful startups in Nigerian history by merely looking at the efficiency in the utilization of factors of production. Yes, the founders would be controlling a huge part of this company which means the bulk of that $200 million would go to them. From left to right, village to town, and across all domains, what the Paystack boys have done is uncommon in Africa, and most especially Nigeria.
Stripe acquires Nigeria’s Paystack for more than $200 Million. When Stripe invested in Paystack a few years ago, many noted that it was certainly a way to understand the market. I did speak and exchanged emails with the co-founder of Stripe, John Collison, during that time. Now, Stripe has understood well enough, and now wants to buy-out the whole company, creating multi-millionaires in Nigeria overnight.
If you want to run a small comparison, Flutterwave has raised $64.5 million. If you want to keep the same multiples, Flutterwave should be worth at least $1 billion. Certainly, Flutterwave is not yet a unicorn.
Yes, I am speechless. I mean, I have never seen this type before in Nigeria. Their multiples are better than anything in the HISTORY OF NIGERIA including Interswitch, Andela, Jumia, etc by looking at the time it took them . Yes, from Andela to Jumia, etc you are talking of truckloads of cash which have been pumped in. But these two boys used largely nothing to create this type of value, in just five years! The Paystack financial velocity ratio is amazing. Yes, with only 60,000 customers, not millions!
CEO of Stripe
“A lot of companies have been, let’s say, heavily influenced by Stripe,” Collison said, raising his eyebrows a little. “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.”
By looking at the multiples and the short time they created this value, Paystack is possibly the most successful Nigerian startup on value creation for investors for deals above $50 million.
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. 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 EMEA. “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.”
The acquisition is subject to standard closing conditions, including regulatory approvals.
Paystack is a technology company powering growth for incredible businesses in Africa. Paystack helps businesses in Africa get paid by anyone, anywhere in the world. Paystack processes over 50% of all web payments in Nigeria, powering payments for over 60,000 organizations, including FedEx, UPS, MTN, and many others.
Businesses use Paystack to accept both online and offline payments through payment channels such as ATM cards, mobile money, USSD, QR code, and more. Businesses also rely on Paystack’s powerful APIs for everything from transfers to automated user verification. Founded in 2015 and launched in January 2016 by Shola Akinlade (CEO) and Ezra Olubi (CTO), Paystack was the first Nigerian company to be accepted into Y Combinator. The company is headquartered in Lagos, Nigeria and has raised over $10 million from both international and local investors including Stripe, Visa, Tencent, Y Combinator, Comcast Ventures Catalyst Fund, Blue Haven Ventures, and Ventures Platform.