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Stripe, Visa join $8 million Series A round in African payments startup Paystack

Paystack has raised $8 million in Series A funding.

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Paystack acquired by Stripe for a reported $200 million in the biggest fintech acquisition in Nigeria's history

Paystack, a Nigeria-based startup providing payments tools to businesses in Africa, has raised $8 million in Series A funding. The round was led by Stripe, and includes Visa, follow-on funding from Tencent and Y Combinator, as well as angel investors Tom Stafford (Managing Partner at DST Global), Gbenga Oyebode (founding partner of Aluko & Oyebode and Board member of MTN Nigeria), and Dale Mathias (Co-founder, Innovation Partners Africa).

This brings Paystack’s total investment to date to more than $10 million. Existing investors include Tencent, Y Combinator, Comcast Ventures Catalyst Fund, Blue Haven Ventures, and Ventures Platform.

Within a little over two years, Paystack’s all-African team has grown to process nearly 15% of all online payments in Africa’s largest economy, powering tens of thousands of businesses of all sizes including telcos, airlines, and government agencies.

Paystack provides powerful APIs to help developers quickly build modern payments experiences online. With only a few lines of code, developers can create custom checkout experiences, build automated recurring billing systems for subscription products, instantly send bulk transfers to any bank account in Nigeria, verify the identity of customers through five different verification APIs, and much more.

Through the company’s sleek payments interface, customers can pay with local and international cards, or directly from their bank accounts. Paystack also supports localized payment channels, including mobile money, QR code, and USSD payments. Every payment is screened by sophisticated fraud-monitoring systems to protect merchants from chargebacks, and Paystack’s direct bank integrations ensure the highest transaction success rates.

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Beyond payments, Paystack provides businesses with powerful growth tools in the form of a Dashboard that helps them closely monitor and act on every aspect of their business’ performance, from granular transaction error data, to detailed customer insights.

“As recently as 2015, it was really difficult for a developer or business owner in Nigeria to quickly start accepting online payments,” says Shola Akinlade, CEO and co-founder of Paystack. “We started Paystack because we believe that better payments tools are one of the most important things that African businesses need to unlock their explosive potential. We think of Paystack as an amplifier of the incredible work that African business owners are already doing. With better technology tools, African businesses can be better equipped to play a growing role in the global economy.”

“The Paystack founders are highly technical, fanatically customer oriented, and unrelentingly impatient,” says Patrick Collison, CEO of Stripe. “We’re excited to back such people in one of the world’s fastest-growing regions.”

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“Africa is central to Visa’s long-term growth strategy, especially when you consider how cash is still a primary payment option for millions on the continent,” says Otto Williams, Head for Strategic Partnerships, Fintechs and Ventures for Visa in Central & Eastern Europe, Middle East and Africa (CEMEA). “Our investment in Paystack aligns with the kind of investments we look for – those that will help extend our reach into the global commerce ecosystem as it changes and grows, and that will provide mutually beneficial business opportunities.”

Paystack will invest the new round of funding in scaling its engineering team, further deepening its payments infrastructure, and accelerating their expansion across the continent.

Akinlade adds: “As Paystack looks to expand rapidly across the continent, we’re thrilled to have the benefit of the deep experience of Stripe, Visa, and Tencent. Our ambition is to give African merchants the tools and services they need to go toe-to-toe with the best businesses in the world, and win.”

About Paystack

Paystack helps businesses in Africa get paid by anyone, anywhere in the world. Paystack processes over 15% of all online transactions in Nigeria, powering payments for tens of thousands of organizations. 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 (disbursements) to automated user verification.

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.

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Companies

Abbey Mortgage Bank Plc projects N60.13 million profit in Q1 2021

Abbey Mortgage Bank Plc has projected a Profit after Tax (PAT) of N60.13million in its 2021 Q1.

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Abbey Mortgage Bank announce the appointment of substantive Managing Director, and 5 Directors.

Abbey Mortgage Bank Plc has projected a Profit after Tax (PAT) of N60.13million in its 2021 Q1.

According to the earnings forecast issued by the bank and seen by Nairametrics, it projected the 134.7% Q-o-Q rise from a loss of N173.49 million recorded in its most audited financial statement for Q3, 2020.

key highlights of its earnings forecast for Q1 2021 when compared with Q3 2020 figures include;

  • Pre-tax profit increased to N88.4 million, +151.5% Q-o-Q.
  • Interest income increased to approximately N515.9 million, +55.45% Q-o-Q.
  • Net operating income increased to N421.94 million, +79.9% Q-o-Q.
  • Interest expense increased to N208.06 million, +63.95% Q-o-Q.
  • Operating expenses declined to N333.52 million, -17.9% Q-o-Q.
  • Credit loss expense increased to N19.83 million, +100% Q-o-Q
  • Gross earnings of N649.83 million
  • Taxation of N28.3 million
  • Other income of N133.84 million.

Bottom line

Despite recording not too impressive results in its last financial statements, the firm is, however, optimistic going for Q1 2021 as reflected in its forecast.

This optimism might be premised on the news of a positive general economy by Q1 2021, which will trickle down to various sub-sectors of the economy.

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Companies

ABC Transport to raise N1.4 billion through rights issue

ABC Transport Plc has secured the approval of its shareholders to raise additional capital through a rights issue.

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The Board of Directors of ABC Transport Plc has secured the approval of its shareholders to raise additional capital through a rights issue from existing shareholders.

This disclosure was made by the board of ABC Transport in a notification issued by the Company’s Secretary, Onyekachukwu C. Chigbo, after announcing shareholders’ resolutions at its 27th Annual General Meeting (AGM), held on Friday 27th November 2020.

READ: Prestige Assurance could be a good opportunity if it gets its recapitalization right

According to the information contained in the notification, the rights issue is N1.4billion, which could be raised via the issuance of shares and debt securities as determined by the Directors of the firm.

However, the rights issue is subject to the approval of regulatory authorities.

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READ: Another Fidelity Bank Non-Executive Director purchases 1 million shares worth N2.75million

What this means

A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. This type of issue gives existing shareholders the “rights” to purchase new shares at a discount to the market price on a stated future date.

However, shareholders are not obligated to exercise this right.

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In this regard, the company may decide to use the additional capital raised from these offerings to existing shareholders to acquire assets, make a take-over, repay debts or save itself from bankruptcy.

This is expected to strengthen the company’s balance sheet, free up capital for the management to execute revenue, and profit optimizing projects, plans, and strategies.

READ: International Breweries Plc raises N165 billion, Rights Issue fully subscribed

What you should know

  • It is important to know that the board decided to raise additional capital after it had secured shareholders’ approval to increase the company’s authorized share capital from N1billion to N2.5billion by the creation of 3billion additional shares of 50 kobo each, ranking pari-passu in all respects with the existing shares in the Company’s equity.
  • In this regard, clause 6 of the Company’s Memorandum of Association and clause 5 of the Articles of Association respectively, will be amended to reflect the increase in the Authorized Share Capital.
  • This amendment will be done by deleting the words, “the authorized Share Capital of the Company is N1billion divided into 2billion ordinary shares of 50 kobo each,” and substituting therewith the words “the authorized Share Capital of the Company is N2.5billion divided into 5billion ordinary shares of 50 kobo each.”

READ: Federal High Court directs meeting to consider the transfer of GTBank into a Holding Company

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Companies

Dangote Cement market capitalization increased by 28% to cross N3 trillion mark in November

Dangote Cement Plc increased market capitalization by 28% to N3.49 trillion at the close of trade on the 30th of November.

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Dangote Cement Plc. appoints Ms. Berlina Moroole as non-Executive Director

The market capitalization of Dangote Cement Plc increased from N2.73 trillion at the open of trade on the 2nd of November 2020, to N3.49 trillion at the close of trade on the 30th of November.

Further checks revealed that the market capitalization of Dangote Cement Plc increased by 28.13% during the period under review.

The drive behind the gains

It is important to note that the increase in Dangote Cement’s market capitalization was driven by the renewed buying interests by investors in key Nigerian stocks with huge values and impressive fundamentals.

This hunt for value on the bourse led to a wild increase in the share price and also the market capitalization of key companies on the Nigerian Stock Exchange in the month of November.

(READ MORE: Dangote Cement gains ₦273 billion on NSE since release of its 2020 Q3 report)

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However, the renewed buying interest can be attributed to the strong performance which Dangote Cement displayed in the third quarter of 2020, despite the challenging macroeconomic environment.

Given the strategic positioning of the cement producer in the industry,

  • Dangote cement reached a record high EBITDA margin of 24% in the third quarter of 2020.
  • Group net profit of N82 billion, which is 135.1% higher than the profit reported by the Group in the third quarter of 2019.

This strong performance made analyst review their models, and also the Group’s valuation, this however triggered buying pressures in the shares of Dangote Cement, with its market capitalization increasing by 28.13% in the period under consideration.

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What you should know

  • Market capitalization is the aggregate valuation of a company based on its current share price and the total number of outstanding stocks.
  • Market capitalization tells how much investors value a company, and gives an idea of what a company is worth on the stock exchange, as well as investors’ perception of a company’s future prospects.

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