Paystack

Paystack
Company type	Private
Industry	Financial technology
Founded	2015; 11 years ago
Founder	Shola Akinlade, Ezra Olubi
Headquarters	Nigeria
Area served	Africa
Key people	Shola Akinlade, Ezra Olubi
Products	Online and offline payment services
Parent	Stripe

Paystack is a Nigerian financial technology (fintech) firm providing both online and offline payment services throughout Africa. Founded in 2015 by Nigerian computer science alumni Shola Akinlade and Ezra Olubi, the company participated in Y Combinator’s startup accelerator program in 2016, obtaining early-stage financing in Silicon Valley prior to its official launch that same year. By 2020, Paystack was supporting more than 60,000 enterprises and was acquired by Stripe for upwards of $200 million—representing the largest startup acquisition in Nigeria and Stripe’s biggest purchase at that time.

History

Paystack was launched in 2015 by Shola Akinlade and Ezra Olubi. After being part of the Y Combinator Winter 2016 cohort, it went public and quickly expanded its reach across various African markets.

In October 2020, Stripe completed its acquisition of Paystack for over $200 million, positioning the company as a vital catalyst for the growth of modern businesses in Africa, with ambitions to assist more companies and consolidate the continent’s fragmented payments ecosystem.

By November 2020, Paystack handled more than half of Nigeria’s online payments and catered to over 60,000 clients, including notable corporations such as FedEx, UPS, and MTN. The company emerged as a significant contributor to Africa’s expanding digital payment industry, enabling smaller enterprises to lower expenses through enhanced payment solutions.

In November 2023, Paystack reorganized its operations to concentrate on growth within African markets, scaling down activities in Europe and the Middle East.

Funding

In 2016, Paystack secured $1.3 million in seed capital from investors like Tencent and Comcast Ventures. Two years later, it raised $8 million during a Series A funding round led by Stripe, with additional backing from Visa and Tencent. In 2020, Stripe acquired Paystack for over $200 million as part of its strategic expansion into Africa. Prior to this acquisition, Paystack serviced approximately 60,000 businesses by facilitating both digital and physical transactions.

Global investment in African fintech

The October 2020 acquisition of Paystack by Stripe exemplifies the increasing global capital flowing into African fintech ventures. Other significant transactions include Network International’s $288 million purchase of DPO Group and World Remit’s $500 million acquisition of Sendwave. Africa’s fintech growth is propelled by widespread mobile money usage and a substantial unbanked population.

Industry experts note that firms such as Visa, Mastercard, PayPal, and Tencent are progressively investing in African fintech startups. Stripe co-founder Patrick Collison identified Africa as a burgeoning market where online commerce is expected to expand by 30% annually.

The COVID-19 pandemic accelerated the shift toward digital banking across Africa; Paystack reported a fivefold increase in new business registrations during 2020. Co-founder Shola Akinlade highlighted how the pandemic revealed deficiencies in digital infrastructure among many African companies, complicating their transition to online payment methods.

In 2021, African startups attracted $5.2 billion in venture capital funding, with fintech accounting for 60% of these investments—underscoring international interest exemplified by Paystack’s acquisition by Stripe. By March 2025, Africa’s e-commerce market continues to grow robustly, driven by an expanding middle class and increased smartphone penetration. Enhanced digital payment systems and growing consumer confidence in online shopping position e-commerce as a central element in Africa’s economic development. Paystack, alongside companies like Flutterwave and M-Pesa, has been instrumental in reshaping the continent’s digital payment environment.

Startup Act (2022)

Fintech ranks among the most rapidly expanding technology industries in Africa, delivering mobile money, digital payment, and lending services to populations without traditional banking access. Nigeria has become a prominent fintech center, attracting significant investments and fostering global growth. In 2022, the Nigerian government passed the Startup Act, which offers tax reliefs and financial support aimed at nurturing entrepreneurial ventures.

Partnerships

2016: Rolled out a payment solution integrated with the e-commerce platform Shopify, enabling a greater number of African merchants to market their products internationally.
2021: Chosen as the preferred payment provider for the open-source e-commerce platform WooCommerce.
2021: Launched support for Apple Pay on its platform, broadening payment choices for businesses in Nigeria.
2022: Collaborated with accounting software company Xero, enabling African customers to embed a "Pay with Paystack" option directly on invoices.

References