FinTech: Stripe Buys Nigerian Payments Processor Paystack For $200M

October 16, 2020 | FinTech, News, Takeovers and Buyouts

Stripe eyes rapid growth in online commerce in Africa.

Stripe, the fintech and payments processing giant last valued at $36 billion, has snapped up Paystack, the Nigeria-based international payments processor for a reported $200 million. (PaymentsSource).

Acquisition logic

In an announcement of the acquisition, Stripe said that the African Internet economy was expanding rapidly and that online commerce in the region was growing at 21% year-on-year. That was 75% faster than the global average.

Ostensibly, Stripe’s motivation is to “help increase Africa’s online GDP.”

Indeed, Paystack is often referred to as the “Stripe of Africa.”

However, Paystack itself is an attractive target for the fintech giant given that:

  • more than 60,000 businesses in Nigeria and Ghana use Paystack to collect online and offline payments
  • it already processes more than half of all online transactions in Nigeria
  • it is PCI DSS Level 1 Certified, the most stringent level of certification in the global payments industry
  • has plans to expand across the African continent
  • Stripe is already an investor in Paystack and the companies have been working together for quite a while
  • Marquee investors in Paystack include Visa Inc (NYSE: V), Tencent Holdings Ltd., Y Combinator, and Comcast Ventures Catalyst Fund.

“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.

“This acquisition will give Paystack resources to develop new products, support more businesses, and consolidate the hyper-fragmented African payments market,” said Matt Henderson, business lead in EMEA.

Stripe raised $600 million in April

In April, the fintech announced a raise of $600 million in its largest funding round ever.

It said at the time that it intended to add to its workforce, advance its software, expand across the globe, and make strategic acquisitions.

Investors in the round, which valued Stripe at $ 36 billion, included Andreessen Horowitz, General Catalyst, GV, and Sequoia.

Related Story:   Payments Unicorn Stripe Raises $600 Million at a $36 Billion Valuation

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