Corporate deals
Paystack acquired by Stripe for a reported $200 million in the biggest fintech acquisition in Nigeria’s history
Nigerian fintech startup, Paystack has been acquired by global fintech giant, Stripe.

Published
6 months agoon

PayStack, a Nigerian fintech startup, has been acquired by global fintech giant Stripe, in the biggest M&A deal in Nigerian tech and one of the biggest in Nigerian corporate history. Paystack was founded in 2016 by Ezra Olubi and Shola Akinlade.
This was disclosed in a press release seen by Nairametrics. The statement read in part:
“In order to help grow Africa’s online GDP, Stripe has entered into an agreement to acquire Paystack, a technology company based in Lagos that makes it easy for organizations of all sizes to collect payments from around the world.
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“Today, more than 60,000 businesses in Nigeria and Ghana use Paystack to securely collect online and offline payments, launch new business models, and deepen customer relationships.
“Incredibly, Paystack already processes more than half of all online transactions in Nigeria.
Paystack has ambitious plans to expand across the continent and recently started a pilot with businesses in South Africa.
“Stripe and Paystack have been working closely together for some time. In 2018, Stripe led Paystack’s Series. A financing round and has provided ongoing guidance as the company rapidly scaled.”
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Following the announcement, TechCrunch on Thursday afternoon reported that Stripe had raised $600 million to invest and acquire payments companies in developing nations. It disclosed that the Nigerian startup had been on Stripe’s bucket list for a while since 2018 when Stripe led an $8 million funding round for PayStack.
Paystack Co-founder Sola Akinlade told TechCrunch that the company was not up for sale when Stripe initially approached for the acquisition; however, the founders are mission-driven and believed Stripe could accelerate it. Akinlade also disclosed PayStack investors, VISA and Tencent also approached to acquire the company.
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“Paystack was not for sale when Stripe approached us.
“For us, it’s about the mission. I’m driven by the mission to accelerate payments on the continent, and I am convinced that Stripe will help us get there faster. It is a very natural move,” Akinlade said.
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Backstory
Nairametrics reported in 2016 when Paystack raised its initial $1.3 Million Seed Funding from both international and homegrown investors.
Founders Ezra Olubi and Shola Akinlade were the toast of the tech space when their company became the first Nigerian tech startup to be accepted into the world-famous Y Combinator program, based in Silicon Valley. They obtained an initial $120,000 seed funding and further technical advice at the program.
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What they are saying
Patrick Collison, CEO of Stripe, told TC that the deal with PayStack is an enormous opportunity, as African e-commerce grows by 30% every year, which would give Stripe an early footing in the region.
“This is an enormous opportunity,” he said.
“In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow about 30% every year. And even with wider global declines, online shoppers are growing twice as fast.
READ: New report details how Nigerian fintech companies are expanding their business scopes
“Stripe thinks on a longer time horizon than others, because we are an infrastructure company. We are thinking of what the world will look like in 2040-2050.”
He added that Stripe is also planning on understanding the ecosystem and keep its eyes open so it can see where help is needed, as the company does not tie up its investments into “complicated strategic investments.”
Collison said that many companies depend on Stripe’s infrastructure, but with PayStack, the founders have organic input in running their operations.
READ: Meet Sola Akinlade, co-founder of Nigeria’s foremost payment platform Paystack
READ: Paystack explains how it will use Truecaller to verify merchants
Stripe said the announcement of the acquisition was delayed due to the #EndSARS protests across the country.
“A lot of companies have been, let’s say, heavily influenced by Stripe.
“But with Paystack, clearly they’ve put a lot of original thinking into how to do things better. There are some details of Stripe that we consider mistakes, but we can see that Paystack ‘gets it’. It’s clear from the site and from the product sensibilities, and that has nothing to do with them being in Africa or African.”
READ: Nigerian fintech companies raised $600 million in five years – McKinsey Report
Shola Akinlade said the payments ecosystem is still broken and PayStack is still in its early days. PayStack provides payments API for companies and takes a cut from every transaction. The company has 60,000 customers so far, from SMEs to large cooperation,s and would continue to run independently.
Techcrunch said the full terms of the deal were not disclosed. However, TC confirmed that it is worth over $200 million, making it the largest tech acquisition in Nigerian corporate history.
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What you should know
According to Crunchbase, PayStack has raised $11.7 million so far.
Corporate deals
DEAL: Shyft Power Solutions raises $3.1m Seed Round to push affordable energy
The funding round was led by the SoftBank Vision Fund’s Emerge Program and Total Carbon Neutrality Ventures with participation from other investors.
Published
5 hours agoon
April 14, 2021
SHYFT Power Solutions, which builds IoT and software to optimize distributed energy resource performance and operational efficiency in emerging markets, has announced an additional $3.1M in funding to bring its total seed round to $3.8M.
The funding round was led by the SoftBank Vision Fund’s Emerge Program and Total Carbon Neutrality Ventures with participation from other investors including Lofty Inc, Samurai Ventures, and Urban US Ventures.
SHYFT was founded by Stanford’s engineers to address the challenges in delivering and scaling clean, reliable, and affordable energy solutions in emerging markets that struggle with unreliable grids or energy access. SHYFT’s initial focus is in Nigeria, a country set to be the 3rd most populous after China and India, but were an unreliable grid has led to widespread dependence on generators, accounting for nearly 8x the capacity of the grid.
READ: Top 10 Nigerian tech companies and capital raised in 2020
SHYFT is pioneering the digitization of the energy landscape in emerging markets like Nigeria. Its asset management solution delivers an integrated approach that uses algorithms to monitor, automate, and optimize how assets, as well as grid connections, are utilized individually and as an integrated system, aggregating a plurality of data streams while doing so.
By increasing visibility and control, the system helps users to make informed decisions about which sources they use, how long they use a source, and when they switch sources. This enables operators to scale distributed systems in a cost-effective way, particularly in remote markets. It has resulted in operators improving RoI, reducing emissions, mitigating downtime, and reducing operational costs, in some cases by up to 57%.
SoftBank Vision Fund’s Emerge Program was established in 2019 to provide select startups with access to the tools, networks, and support to take their business to the next level. Total Carbon Neutrality Ventures is focused on finding, funding, and fostering high-potential startups which will contribute to creating a low carbon future.
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SHYFT plans to use this new funding round to double its team in West Africa over the next year with a focus on developing AI capabilities to use its data and algorithms for system optimization. The company will also look to build corporate partnerships and expand to additional African markets facing similar energy challenges.
SHYFT’s customers and strategic partners include some of the largest and fastest-growing alternative energy companies in Nigeria, including Daystar Power Solutions and Aspire Power Solutions. After passing critical IEC safety testing for their controllers, the company began ramping up sales across Nigeria over the past year with their customers. Today, they have over 2,000 kW of assets being managed by SHYFT technology and expect that to increase ten-fold by the end of 2021. Nearly every major bank in Nigeria has a branch using SHYFT technology, creating a path for SHYFT and its customers to deliver reliable power to the nearly 5,000 branches in the market.
What they are saying
Ademidun Edosomwan, Managing Director, Emerging Markets at Total Carbon Neutrality Ventures (TCNV), said: “Energy is an essential need for all, yet it is estimated that more than 3.5 billion people globally lack access to affordable and reliable electricity. SHYFT’s technology will play a critical role in a global movement to democratize the way people manage their power sources. They’ve developed data-driven software that enables homeowners and businesses in emerging markets to make smarter decisions on their energy use in order to cut costs and reduce emissions. We are delighted to support SHYFT’s momentum as Ugwem and the team continues to expand their impact and help build a better energy future for the world.”
Ugwem Eneyo, Co-Founder & CEO SHYFT said. “I founded SHYFT to build the technology that can enable and accelerate this transition, and ensure that on the path to reliable energy access, the use of cleaner solutions can mitigate carbon emissions as well. We are fortunate to have investors supporting us where their sector and global experience will be invaluable.”
Corporate deals
DEAL: Nigerian fintech software provider, Appzone raises $10m to scale its products and services
Appzone platforms are used by 18 commercial banks and over 450 microfinance banks in Africa.
Published
2 days agoon
April 12, 2021
Appzone a fintech software provider that builds proprietary solutions for financial institutions and their banking and payments services announced that it has closed $10 million in Series A investment.
The Series A round was led by CardinalStone Capital Advisers, a Lagos-based investment firm. Other investors include V8 Capital, Constant Capital, and Itanna Capital Ventures. New York-based but Africa-focused firm Lateral Investment Partners also participated.
Founded in 2008 by Emeka Emetarom, Obi Emetarom, and Wale Onawunmi, Appzone functions as an enabler (at payment rails and the core infrastructure) within banking and payments.
READ: Shola Akinlade: The inspiration behind Paystack’s success
Appzone platforms are used by 18 commercial banks and over 450 microfinance banks in Africa. Together, they amass a yearly transaction value and yearly loan disbursement of $2 billion and $300million.
Before now, Appzone closed a $2 million deal from South African Business Connexion (BCX) in 2014. Four years later, it raised $2.5 million in convertible debt and bought back shares from BCX in the process. But overall, the company says it has raised $15 million in equity funding.
This new funding will be used to scale its products and services and expand across more African countries. The startup also plans to achieve scale by growing its engineering team.
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What they are saying
Yomi Jemibewon, the Co-Founder and Managing Director of Cardinal Stone Capital Advisers, said the firm’s investment in Appzone is further proof of Africa’s potential as the future hub of world-class technology.
READ: Bill Gates holds far more cash than Nigeria’s foreign reserve
“Appzone is building a disruptive fintech ecosystem that will be the backbone of Africa’s finance industry with products across payments, infrastructure, and software as a service. The impact of Appzone’s work is multifold — the company’s products deepen financial inclusion across the continent whilst providing best-fit and low-cost solutions to financial institutions. Its emphasis on premium talent also helps stem brain drain, rewarding Africa’s best brains with best-in-class employment opportunities.”
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