Amid difficult news in Nigeria over the past few weeks with the nation protesting for the disbandment of the country’s Special Anti-Robbery Squad, comes positive news for the nation’s fintech space. Stripe has announced that it will be acquiring Nigerian start-up Paystack, the company that has quickly become known for simplifying the process of collecting payments from all over the world for organizations of all sizes.
While the terms of the deal have not been disclosed, sources close to the deal have shared that the purchase will be worth over $200 million. If true, this will be the largest start-up acquisition to come out of Nigeria, as well as Stripe’s biggest acquisition to date.
This follows an announcement earlier this year by Stripe that the company would be expanding its API-based payments services into more geographies after securing another $600 million in funding. This further signals a change in Stripe’s strategy from one that focused on acquiring smaller companies to expand its technology stack, to making acquisitions based on its global footprint.
The purchase confirms a trend of growing interest in the African internet economy which is expanding quickly. At present, online commerce in the region is reportedly growing 21% year-over-year which is 75% faster than the global average. In August, Sendwave purchased Kenyan fintech WorldRemit for $500 million.
At the time of purchase, Paystack proudly boasted more than half of online transactions in Nigeria coming through its platform. Currently, over 60,000 businesses in Nigeria and Ghana use Paystack to securely collect their online and offline payments, launch new business models, and deepen customer relationships. Paystack had also intended to expand across the continent before this acquisition, which it will continue to do.
Although it wasn’t Paystack’s plan to sell the business, the move made sense to the start-up. Stripe and Paystack had been working closely for some time ever since Stripe led Paystack’s $8 million Series A financing round in 2018. Since then, Stripe has remained a key point of guidance to the start-up as it rapidly scaled.
Paystack Co-Founder and CEO Shola Akinlade said, “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.”
It is clear from this deal that not only is Stripe maturing as a business and expanding its global footprint with decades long strategy in mind, it’s also placing a big bet on the potential of the emerging markets in Africa.