From Paystack to Stripe: A bright light shines on African tech ecosystem

Saviour Adugba

News broke this week that Stripe, a United States tech company known specifically for digital payments in Silicon Valley has acquired Nigerian tech startup, Paystack in a mouth-watering deal rumoured to be in the region of $200m.

Announcing the deal in an official blog post, Paystack co-founder, Shola Akinlade said, “I’m thankful to share that Paystack is joining the Stripe family. We’ll be acquired by Stripe to accelerate online commerce across Africa, pending standard closing conditions, including regulatory approvals.”

Confirming the news, Patrick Collison, the CEO of Stripes gave credit to the growth of the African tech ecosystem saying, “I couldn’t be more delighted that Paystack will be joining us at Stripe. The African tech ecosystem is expanding very rapidly. We and the Paystack team are eager to invest in a big way over the years to come.” This news immediately drew applause from key players in the Nigerian tech ecosystem and beyond.

According to multiple analysts that reacted, this acquisition sends positive signals about the tech ecosystem in Africa. Noting the importance of this deal, Rebecca Enonchong, a Cameroonian tech entrepreneur and CEO of L os-Angeles-domiciled Apps Tech said, “The Paystack acquisition will have a ripple effect across our entire ecosystem. Investors are getting a pay day! This is major!”

The acquisition also highlights the potential of the Nigerian tech ecosystem and the African tech ecosystem as a whole. It helps prove to governments and regulators that if the right policies and environments are provided, young Africans have what it takes to play on the global stage.

Jason Njoku, a serial tech entrepreneur in Nigeria, commenting on the deal noted that the acquisition was the “deal of the decade.” Stating that, it shows the potential of the Nigerian tech ecosystem. “The deal of the decade,” Jason Njoku tweeted on his official Twitter handle. “Shola Akinlade and Ezra Olubi have just crystallized what Nigerian technology can do. I couldn’t be more happier for the entire team. Paystack is a very very special company,” he continued.

Corroborating this claim, Taiwo Oyeleye, a tech consultant while speaking with Arise Tv on the acquisition said, “This (the deal) helps shine the light in a different direction. (It means) that we are hardworking, dedicated, committed people who are largely good people.

He noted that the global market is driven more by perception than reality, and as such, a positive outlook on the country is important to drive growth. It also has to be noted that it is very impactful when global players like Stripe pick an interest in startups on the continent; it helps bring much-needed attention to the continent in a positive light. In a continent and a nation that has been cast in the negative light for so long, the importance of positive attention cannot be overemphasized.

Noting this impact, Aubrey Hruby, an Africa-focused investment advisor when speaking to AllAfrica. com reiterated the importance of deals like this to the African ecosystem as a whole. She said, “Steller exits such as this bring global visibility to the African entrepreneurial ecosystem and show investors that they can get a return on their early investments.”

Paul Graham, a renowned American Computer Scientist also recognises the role that the acquisition of Paystack will have for other Nigerian and by extension African tech entrepreneurs. In a conglaturatory message posted on twitter, Graham said, “Congratulations to Paystack, who are paving the way both for the 60,000 users they’ve built infrastructure for, and for other Nigerian founders, who’ll find it easier to raise money once investors realize what a rapidly growing market Nigeria is.”

Dare Obasanjo, a partner group programme manager at Microsoft, in his own submission referred to Stripe’s acquisition of Paystack as a “massive validation of the Nigerian tech ecosystem.” In his own words, Obasanjo said, “Stripe biggest acquisition ever is a Nigerian payments startup, Paystack, for $200M. This is a massive validation of the Nigerian tech ecosystem and a good reminder why Facebook & Microsoft now have engineering offices down there.”

The most exciting aspect of the acquisition however is the fact that it will lead to more Silicon Valley investment in different parts of Africa. Many investors and organisations alike will look towards Africa now in their investment quests.

Iyanuoluwa Aboyeji, a co-founder of Flutterwave seems to agree with this notion when he said that the acquisition of Paystack by Stripe is “a sure sign of what is possible” in the African tech ecosystem.

Flutterwave, another payments company in the Nigerian tech ecosystem echoed the importance of the Stipe-Paystack in its official congratulatory message. “Congrats to the Paystack team, this is amazing, and a great step for the Fintech Community in Africa!” a statement on Flutterwave’s official handle read.