Stripe Acquires Nigeria’s Startup, Paystack For Over $200m To Expand In The African Continent

Stripe announced earlier this year that that it had picked up another $600 million in funding, it said one big reason for the funding was to expand its API-based payments services into more geographies. 

Today the company is coming good on that plan in the form of some M&A.

Stripe is acquiring Paystack, a startup out of Lagos, Nigeria that, like Stripe, provides a quick way to integrate payments services into an online or offline transaction by way of an API. 

Paystack had been referred to as “the Stripe of Africa.” The company currently has around 60,000 customers, including small businesses, larger corporates, fintechs, educational institutions, and online betting companies, and the plan will be for it to continue operating independently.

Terms of the deal are not being disclosed but sources close to it confirm that it’s over $200 million. That makes this the biggest startup acquisition to date to come out of Nigeria, as well as Stripe’s biggest acquisition to date anywhere. 

It’s also a notable shift in Stripe’s strategy as it continues to mature: typically, it has only acquired smaller companies to expand its technology stack, rather than its global footprint.

The deal underscores two interesting points about Stripe, now valued at $36 billion and regularly tipped as an IPO candidate.

First is how it is doubling down on geographic expansion: even before this news, it had added 17 more countries to its platform in the last 18 months, along with progressive feature expansion, And second is how Stripe is putting a bet on the emerging markets of Africa specifically in the future of its own growth.

Patrick Collison, Stripe’s co-founder and CEO, in an interview with TechCrunch said, “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.”

For Paystack, the deal will give the company a lot more fuel (that is, investment) to build out further in Nigeria and expand to other markets, CEO Shola Akinlade said in an interview.

Akinlade, who co-founded the company with Ezra Olubi (who is the CTO) said, “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.”

Paystack had been on Stripe’s radar for some time prior to acquiring it. Like its US counterpart, the Nigerian startup went through Y Combinator that was in 2016, and it was actually the first-ever startup out of Nigeria to get into the world-famous incubator.