Every single problem one might have thought about a decade ago, concerning finance and technology is being taken care of one after another, and we have a generation of fintech founders to thank for this. Shola Akinlade, co-founder and CEO of Paystack is one of them.
Shola was born in Lagos, Nigeria and attended St Gregory’s College before proceeding to Babcock University for a Bachelors Degree in Computer Science. Fresh out of school, Akinlade worked as a Management Trainee and Database Manager with Heineken, but left after two years because he wanted to create things, rather than just be a management staff.
He took his first shot at entrepreneurship when he founded Klein Devort, a software development and consulting company, with his friend, Mayowa Okegbenle in 2008. Their flagship product, Precurio was designed as a collaboration and content management platform for the mid-enterprise segment and businesses in emerging markets. Akinlade said that the inspiration for the project was Dropbox. Within five years of running this company, the duo had grown their small idea and had over 200,000 companies using it. It had been downloaded over 150,000 times and was available in six different languages.
The success of Precurio opened Akinlade to more opportunities and some banks started reaching out to him to build software. It was in the course of executing these projects that the inspiration for Paystack came.
“I always knew the state of payments wasn’t where it should be, but I didn’t think it was going to be me. But just working with the banks, I just figured if there’s someone that can figure out payments, it probably will be me because I built world-class software before and now I have access and I understand how the financial system works,” he said.
Within a year, a lot of the underground work had been done between Akinlade and Ezra Olubi, his friend and co-founder. Olubi had, in the past, worked on a payments company that did not pull through so he was the perfect choice of a partner for Akinlade. The challenge for them was to solve the issue of online payments in Africa by connecting the super-fragmented aspects of the financial sector.
They went ahead to develop multi-channel payment options for merchants across the country, enabling them to accept payments from around the world, via credit card, debit card, and direct bank transfer on the web and mobile.
“I started speaking with people in the tech ecosystem and then put up a waiting list, which was really just a call for those who wanted to try out what we were working on. Within one month, we had over 300 people join the waiting list. From this, we felt that we had tapped into an issue that was experienced by many, so we grew the idea from there,” he recounted in an interview.
By the time they were invited for an interview at the tech accelerator Y Combinator program, they had a waiting list but were yet to launch out.
“As I just got in, they’re like, “Hey, tell us what you guys are working on?” I said, “I’m working on Paystack it’s a payments company. We’ve made a huge leap over what currently exists. It used to be about seven steps before, it’s now about two steps.” They’re like, “Show us.” I had to just pull out a laptop, show them, “Wow, this is interesting.”
It went very fast, but it went well I think. I remember they asked us why we were not live. We said we just had a waitlist, we were worried about fraud and all that. They said, they don’t think we should put in a shell barrier to growth. We’re growing, if people want it then open it up. We got a call later that evening asking if we wanted YC’s investment” Akinlade narrated.
Paystack launched in January 2016 and became the first Nigerian company to be accepted into the tech accelerator Y Combinator program, and received funding of $120,000.
“They funded us with $120k and advised us to focus on building our product and talking to our customers, noting that almost everything else involved in building our ideas and company, would be a distraction. They helped us focus on the detail; the core structure of the company that was going to help us scale,” Akinlade said.
They rode on the back of this feat to secure the attention of more investors at the Demo Day and raised more seed funding amounting to $1.3 million. This funding, according to Akinlade, was used to accelerate product development, build the engineering team, grow the sales and marketing operations. Paystack has come a long way since then, and now services hundreds of thousands of companies and major businesses.
Akinlade also adds that before building Paystack, he had contemplated a B2B payment systems similar to Brex (an American financial service and technology company that offers business credit cards and cash management accounts to tech companies), and even went as far as buying the domain but never actually pushed through with it.
In 2018, the company announced that it had raised $8 million in Series A funding that had Stripe, Visa and Tencent as major investors. With the 2020 coronavirus pandemic, the company’s growth has now accelerated with more customers and signups. October 2020 came with another milestone; Paystack had been acquired by the US payments giant, Stripe for over $200 million, making it the biggest acquisition in Nigeria. For Stripe, this was part of an expansion strategy since Paystack serves a large market in the Nigerian and African fintech space.
An important thing to note about this deal is that Paystack continues to operate independently with Akinlade as CEO. About the acquisition, Akinlade said, “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.”
When Shola is not working…
The payments founder admits that sometimes it gets all busy that he has to consciously step back for a breather. He sleeps while flying, does occasional exercises and just relaxes with family when he finds the time. Personal relationships matter to him, but work hardly gives him time to nurture most of these relationships and thankfully, his friends understand.
He also relaxes with African music a lot, and said in an interview that, “if I ever stopped doing Paystack I’ll have to be a DeeJay.”