The Nigerian financial space is currently being disrupted by a group of new companies building financial technology (Fintech) solutions.
With this set of ‘disrupters’ leveraging on the latest mobile, cloud, and digital technologies, Nigeria is increasingly becoming a home to Fintech firms, thereby changing the narrative in the payments and banking ecosystem.
The financial space has changed from boring, at the turn of the last decade, to something that was more interesting in recent years. However, things are gradually moving towards inspiring with the emergence of these new disrupters who are constantly injecting fresh innovations into the payments scene to ensure that merchants collect payment from their customers in the most seamless and secure manner.
Enter Sola Akinlade, co-founder and CEO of Paystack, one of such disrupters making a bold move to revive the Nigerian payment system. Paystack is a modern payments platform that allows Nigerian merchants to receive funds from anyone, anywhere in the world.
In a question & answer session with Sola, he revealed the journey with Paystack.
His education and work experience
Sola was born in Lagos and went to St. Gregory’s College for his secondary education. He proceeded to Babcock University, where he bagged a degree in Computer Science in 2006. After his university education, he worked at Heineken as a Management Trainee, specialising in database management from 2007 and left in 2009.
Shortly after that, he spent the next 5 years working on a software called Precurio, an open source collaboration platform like Dropbox, which was used by over 200,000 organisations. While working on the software, a few banks reached out to him to help them build software, this was when he realised that he could take a stab at figuring out how to make payments easier for businesses in Africa.
What gave birth to Paystack?
During Sola’s stint as a software engineer working with banks, he saw an opportunity to solve several payments challenges that African businesses face using technology. Equipped with the technical skills to take on the challenge, and together with his co-founder, Ezra, they both started to build the Paystack platform and today, the platform serves over 17,000 businesses, and process over 15% of all online payments in Nigeria.
In his words:
“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.”
Prior to the formal launch of the platform in 2016, he had started talking with several business owners to understand their payment challenges, and it was very clear from the interaction with them that a large market lay waiting.
During its launch in January 2016, Paystack already had a waiting list of about 300 businesses – all of whose owners he had spoken with to understand their pain points and how Paystack could solve their challenges. Paystack also got inducted as the first Nigerian company into Y Combinator, a Silicon Valley-based incubator. These signaled as validation that the platform was worthwhile and that Paystack would be a success.
Building the right team
In the early days, the real work was trying to convince partners to work with the team and move fast to actualise its dream. According to Sola, in building a formidable team, the platform looks out for 3 things when hiring: deep curiosity, an ability to solve problems, and deep empathy. From its early days of just 2 people in the company to over 30 now, these three qualities, have helped in building an incredibly formidable team dedicated to solving the payment problems in Africa, and helping businesses grow.
The new Series A funding
The platform recently announced that it has raised $8 million in Series A Funding. The round was led by payment leaders: Stripe, Visa, and Tencent. Follow-on funding was from 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.
The company said the new Series A funding will be used to power its next stage of growth – building out its payment infrastructure even further, expanding across Africa, and becoming a complete growth engine for modern businesses in Africa.
Concerns that foreign investors are taking over Nigeria’s tech startups
According to Sola, tech startups will continue to seek funding where available especially as many startups aspire to not only excel locally but also to thrive globally.
“At a global scale, the important thing to look out for when seeking investors isn’t just capital, it’s also to build strategic relationships. These are some of the reasons, for instance, why Paystack chose Stripe and Visa – two of the world’s biggest payment companies – as investors.”
“I believe that once this generation of tech companies become successful and achieve liquidity, a lot of the ‘local’ value generated will go into funding the new generation of startups”
Are fintechs kicking out banks?
Sola believes that banks and fintechs have different but important roles to play in the financial space. He is optimistic that the relationship between the two players will continue to evolve but predicts that even a few banking services will be delivered by fintechs, while the ‘brick and mortar’ bank will always exist.
Paystack in the next 5 years
In 5 years, the goal is to power growth for even more African businesses and enable newer business models across Africa.