For some time now, there has been muted talks about a major fintech startup in Nigeria getting acquired by a global player.
A source had mentioned that this will happen in August, alas August came and went by and there was no activity.
What we now know is that the Nigerian fintech startup, Paystack has been acquired by the US payments giant, Stripe.
Although the financial details of the deal are not public, BELT believes that Stripe is thought to have paid over $200m.
This will make it the biggest acquisition deal in Nigeria to date.
This edges out the $200 million Visa paid for 20% of Interswitch in November 2019. Interestingly, Visa’s decision to buy a stake in Interswitch was another sign of a big acquisition in the fintech space.
About the business end
Paystack is one of the several fintechs that have disrupted the Nigerian fintech space. It has developed APIs for identity verification, checking of account balances, automating bank transfers, amongst many other functions.
The result of all of these is that, along with other fintech startups like Flutterwave, it has reduced the cost of processing payments in Nigeria. Solving this payment processing problem means that Paystack serves around 60,000 customers.
Paystack will however continue to operate independently. Over time, its capabilities will be embedded in Stripe’s programmable platform for global money movement that currently spans about 42 countries.
Matt Henderson, the business lead, Emea, Stripe, says: “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.”
Shola Akinlade, CEO, Paystack, adds: “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.”