Home / Tech News / Paystack, with ambitions to become the Stripe of Africa, raises $8M from Visa, Tencent… and Stripe itself

Paystack, with ambitions to become the Stripe of Africa, raises $8M from Visa, Tencent… and Stripe itself

Africa has been one of the least-developed regions globally when it comes to technology and being on the less advanced side of the so-called digital divide. But with a huge population and a set of nations whose economies are rapidly changing, we are seeing a significant knock-on effect in tech. Today, one of the more interesting startups, in the area of financial services, is announcing some funding that underscores that trend.

Paystack, a Stripe-like startup out of Lagos that provides online payment facilities to merchants and others by way of an API and a few lines of code, is announcing that it has raised $8 million in a Series A round of funding. The company is active today in Nigeria, where its payment API integrates with tens of thousands of businesses, and in two years it has grown to process 15 percent of all online payments; and the plan is to both continue to growing in its home country, as well as expand to more, starting with Ghana.

I describe Paystack as “Stripe-like”, and in an interesting twist, the round is being led by none other than Stripe itself — a mark not just of how the latter (once a YC startup itself) is eyeing up like-minded global founders and businesses as it continues to grow, but also how Stripe understands the challenges of breaking into a region like Africa, and therefore sees an opportunity to work with and support those who are.

“It takes a lot of local nuances to build for African businesses,” said Shola Akinlade, the CEO of Paystack who co-founded the company with Ezra Olubi (who is the CTO). “Paystack seems to be the only one doing this.”

In 2016, Paystack became the first startup from Nigeria to enter Y Combinator, and the incubator is doing some follow-on investing in this round. Other strategic investors in this Series A include Visa and the Chinese online giant Tencent, parent of WeChat and a plethora of other services. (Tencent also invested in Paystack’s previous round: the startup has raised $10 million to date.)

Stripe scored a big win in financial services in the West when it developed a very quick and easy way of integrating payments into any app or website, taking what used to involve a lot of integration and negotiation and reducing it into a few lines of code. It came just at a time when apps were starting to take off, and people were coming around to feeling more comfortable about making financial transactions online, as long as they were easy to do.

Paystack has followed a similar template, albeit much more localised.

Nigeria is one of the biggest economies in Africa and the largest in the sub-Saharan region, but even so, it is only just getting the ball rolling on digitising commerce. There have been other payment providers operating in the market — Interswitch being perhaps the biggest — but Akinlade describes Paystack’s focus as a more modern take on payments. Specifically, its focus is on integrating the wide range of payment options that Nigerians (and soon, those in other countries in Africa) use both to accept payments and make them.


Today, that list of options is long and fragmented. Paystack makes it possible to make and take payments using payment cards, which is the norm in many Western markets, but also bank transfers, and a number of payment routes that have arisen out of the fact that many people are “unbanked” — that is, without bank accounts or credit histories built by using payment cards. These include mobile money services, which essentially turn a user’s mobile calling account into a place to store and pay out money; and USSD-based services, which use an even more basic part of a phone’s communications infrastructure to send messages and money (USSD has been using by a number of other providers looking to provide more connectivity in emerging markets). All this involves Paystack not only working with all major banks, but all major mobile carriers to cover the range of payment methods.

Creating those relationships is not only more challenging for those less familiar with the landscape, but potentially something that they are less interested in doing on their own when the market remains still relatively small. Shola Akinlade, the CEO of Paystack who co-founded the company with Ezra Olubi (who is the CTO), said that the total amount processed monthly

Times are most definitely changing. Now there have been around nine startups out of Nigeria that have gone through YC. That’s probably still proportionately too few, considering the wider opportunity and number of developers across Africa, but it is a start.





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


  • Nigerian payments company Paystack has raised Series A funding from global payments leaders Stripe, Visa, and Tencent
  • In little over two years, Paystack has grown to power tens of thousands of businesses of all sizes, and already processes more than 15% of all online payments in Nigeria—Africa’s largest economy.
  • The funding will be used to fuel Paystack’s continental expansion, build out their payments infrastructure, and grow their engineering team.


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 (Chairman Partners Forum, Africa Private Capital Group, USAID).


This brings Paystack’s total investment to date to more than $10 million. Existing investors include Tencent, Y Combinator, Comcast 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.


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.”


“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, and Ventures Platform.


Background: homegrown Nigerian, studied computer science, then worked with Heineken for two years. Got bored. I wrote am emerging market version of dropbox. 200k+ co’s using

Precurio was the name. 5 years. Then at some point Nigerian banks started reaching out, help me build this

Financial services sw for three banks and quickly realised that payments were not the same there as in the US and UK. I thought working with the banks I had a shot. Spent a year figuring it out. Ezra my cofounder we went to school and we’d tried to do this before

Trying to join me. We applied to YC and got in, the first to get in, now 8 or9.

Jan 2016 and grew signif every month


It is like stripe but for Africa, and starting in Nigeria. Our thinking is that biz don’t hae all the tols they need. Need heavy lifting for busineses. As an engineer myself it was easy to fig it out. The first thing we did was make it easy for biz to get paid. Before three or four weeks to start accepting payments

Now get started in less than 30 minutes

Also easier to get paid.

Recurrent billing.

More than getting paid fast let’s make it easy for biz to grow. So started building tools to fig out who and what customers are

Solutions to get started very fast


How we’re dif from stripe and visa: payments is very local. Paystack supports multiple payment methods, cards, bank accts, our connections to the financial infrastrcutre.

It’s very local and I haven’t seen it in the continent

It takes a lot of local nuances to build for the African biz.

Paystack seems to be the only one doing this

Over $20m monthl in gmv every year

The sophistication of those tools even for the biz using us is impressive. The fascination locally is how can a home grown team who went o wchool in Nigeria build world class


The journey is not over payments is still very much broken but if any co will figure it out is has to be paystack.

Specifically for merchants the fact that a team of 29 ppl listening to them and solving probs and working with banks so that they don’t have to do it is exciting.


I don’t know from their side. Stripe cando whatever they want they are a wonderful co but the fascination is being in payments themselves realising how much work paystack has done and how much progress has been made and a team that has figured payments out, we want to supportthem  (the thinking)


One of the strong pillars in the fundraise

We want to spend a lot of time building for this market in Nigeria the largest in Africa and now we are ready to go into other countries. We’ve already stared the process and will start in other countries. Def ghana is next and a few other markets… we are lolking at Kenya, SA and moroccoa.


That’s the point mpesa is not used in Nigeria for one example. We are looking to understand and build out this

The co that is doing well is interswitch. They should be a uncorn by now. A big payments co/ they did a good job building the financial infra for payments in Nigeria in 2002, and I suspect that paystack is doing a very good job to build a payments co in 2016.


The modern feel of paystack is important things move very fast.

To support new biz models.


Branch – this wouldn’t exist in Nigeria if not for the new payment infrastructure


Savings, lendings, this is just exciting.


For us two things we’re not worried about that. We have a good olumn of customers looing into new markets. The focus of our strategys is how can we help our customers move into new markets. Second is how do you get bnew customers in enw markets.

It’s not something we have done but we have. A good capacity and understand and we are willing to go through the rigor. It’s a bit of patient and impatient.

Willing to do the hard woirk it takes but willing to move fast.

Paystack is willig


We think we want to focus on the continuent. One thing we want to do is help other co’s become profitable. Convinced that there are so many biz in Africa and we ddon’t have the access no one is building the right tools.

Isuspect that until we solve the prob here we will be solving the probs elsewhere


$20m in GMV in USD monthly and that’s growing fast.

Last year we grew 1000% dec 2016 and dec 2017.


Seed round to this round 30x growth in gmv.


We take about 1.5%


We are not yet profitable. We are making a lot of money but are putting it into innovation and infrastructure.


Things are getting better. Guidelines are good for payments, very straightforward and smple and guildelines for running these in these markets.


As to the wider financial services industry I wouldn’t know but my experience is that from Nigerian reugators they are open to engagement and I suspect that a few startups shy away. I think that with engagement they will make it work. I will say that guidelines are good what I expect and we have looked at it.


We don’t think it’s a rpb we are will ing to do the work.


I’m very excited when Nigerian co’s get into YC 2 years ago it was just us and now 9. Founders building solid biz in Africa and not seeing ppl who have done it before them has always been aproblem. Have been excited to see andela doing this. So many co’s know they can build a solid biz.


Just being engineers ourselves used to be a classic narrative that you eneded to be a biz person but that is false. Just build a solid biz that ppl will love and I’m happy to be involved


For devs in Africa hard to see who to look up tol now paystack founders are good developers all that is what makes it more exciting.


I admit that fundraising is hard everywhere. Categorically investors are realising that Africa is the next frontier and is extremely big. I remember when I got into my yc interview ezra and I went and we met ppl the first co that I met we were given a shirt that never gets dirt. And another was building a bra that detects breast cancer. We were shocked that we were just building payments. Not world changing but when you say payment sfor Africa they are excited.! It’s gong to be big. So investors realise that Africa has a lot of potential. For us, it was difficutl but not very difficult it was easy to show the potential of the African market and once you show that and traction it was easy.

I wll say that I think that in the last three years there has been increased investor interest. Founders

Investors realise the potential of the African market and I think that founderstthat build biz that show this potential shouldn’t have issues fundraising.





Ask about andala.

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