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Stripe Acquires Nigeria ’ s Paystack For $200 Million To Expand Into Africa

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images 1 1 Stripe Acquires Nigeria ’ s Paystack For $200 Million To Expand Into Africa

When Stripe announced earlier this year that it had picked up another $600 million in funding, it said one big reason for the funding was to expand its API-based payments services into more geographies. Today the company is coming good on that plan in the form of some M&A.
Stripe is acquiring Paystack, a startup out of Lagos, Nigeria that, like Stripe, provides a quick way to integrate payments services into an online or offline transaction by way of an API. (We and others have referred to it in the past as “the Stripe of Africa.”)
Paystack currently has around 60,000 customers, including small businesses, larger corporates, fintechs, educational institutions, and online betting companies, and the plan will be for it to continue operating independently, the companies said.
Terms of the deal are not being disclosed but sources close to it confirm that it’s over $200 million. That makes this the biggest startup acquisition to date to come out of Nigeria, as well as Stripe’s biggest acquisition to date anywhere. (Sendwave, acquired by WorldRemit in a $500 million deal in August, is based out of Kenya.)
It’s also a notable shift in Stripe’s strategy as it continues to mature: typically, it has only acquired smaller companies to expand its technology stack, rather than its global footprint.
The deal underscores two interesting points about Stripe, now valued at $36 billion and regularly tipped as an IPO candidate (note: it has never commented on those plans up to now). First is how it is doubling down on geographic expansion: even before this news, it had added 17 more countries to its platform in the last 18 months, along with progressive feature expansion. And second is how Stripe is putting a bet on the emerging markets of Africa specifically in the future of its own growth.
“There is enormous opportunity,” said Patrick Collison, Stripe’s co-founder and CEO, in an interview with TechCrunch. “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. 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.”
For Paystack, the deal will give the company a lot more fuel (that is, investment) to build out further in Nigeria and expand to other markets, CEO Shola Akinlade said in an interview.
“Paystack was not for sale when Stripe approached us,” said Akinlade, who co-founded the company with Ezra Olubi (who is the CTO). “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.”
Paystack had been on Stripe’s radar for some time prior to acquiring it. Like its US counterpart, the Nigerian startup went through Y Combinator — that was in 2016, and it was actually the first-ever startup out of Nigeria to get into the world-famous incubator. Then, in 2018, Stripe led an $8 million funding round for Paystack, with others participating including Visa and Tencent. (And for the record, Akinlade said that Visa and Tencent had not also approached it for acquisition. Both have been regular investors in startups on the continent.)
In the last several years, Stripe has made a number of investments into startups building technology or businesses in areas where Stripe has yet to move. This year, those investments have included backing an investment in universal checkout service Fast, and backing the Philippines-based payment platform PayMongo.
Collison said that while acquiring Paystack after investing in it was a big move for the company, people also shouldn’t read too much into it in terms of Stripe’s bigger acquisition policy.
“When we invest in startups we’re not trying to tie them up with complicated strategic investments,” Collison said. “We try to understand the broader ecosystem, and keep our eyes pointed outwards and see where we can help.”
That is to say, there are no plans to acquire other regional companies or other operations simply to expand Stripe’s footprint, with the interest in Paystack being about how well they’d built the company, not just where they are located.
“A lot of companies have been, let’s say, heavily influenced by Stripe,” Collison said, raising his eyebrows a little. “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.”
Stripe, with its business firmly in the world of digital transactions, already has a strong line in the detection and prevention of fraud and other financial crimes. It has developed an extensive platform of fraud protection tools, but even with that incidents can slip through the cracks. Just last month, Stripe was ordered to pay $120,000 in a case in Massachusetts after failing to protect users in a $15 million cryptocurrency scam.
Now, bringing on a business from Nigeria could give the company a different kind of risk exposure. Nigeria is the biggest economy in Africa, but it is also one of the more corrupt on the continent, according to research from Transparency International.
And related to that, it also has a very contentious approach to law and order. Nigeria has been embroiled in protests in the last week with demonstrators calling for the disbanding of the country’s Special Anti-Robbery Squad, after multiple accusations of brutality, including extrajudicial killings, extortion and torture. In fact, Stripe and Paystack postponed the original announcement in part because of the current situation in the country.
But while those troubles continue to be worked through (and hopefully eventually resolved, by way of government reform in response to demonstrators’ demands), Paystack’s acquisition is a notable foil to those themes. It points to how talented people in the region are identifying problems in the market and building technology to help fix them, as a way of improving how people can transact, and in turn, economic outcomes more generally.
The company got its start back when Akinlade, for fun (!) built a quick way of integrating a card transaction into a web page, and it was the simplicity of how it worked that spurred him and his co-founder to think of how to develop that into something others could use. That became the germination of the idea that eventually landed them at YC and in the scope of Stripe.
“We’re still very early in the Paystack payments ecosystem, which is super broken,” said Akinlade. The company today provides a payments API, and it makes revenue every time a transaction is made using it. He wouldn’t talk about what else is on Paystack’s radar, but when you consider Stripe’s own product trajectory as a template, there is a wide range of accounting, fraud, card, cash advance and other services to meet business needs that could be built around that to expand the business. “Most of what we will be building in Africa has not been built yet.”
Last month, at Disrupt, we interviewed another successful entrepreneur in the country, Tunde Kehinde, who wisely noted that more exits of promising startups — either by going public or getting acquired — will help lift up the whole ecosystem. In that regard, Stripe’s move is a vote of confidence not just for the potential of the region, but for those putting in the efforts to build tech and continue improving outcomes for everyone.

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Lower oil demand may persist beyond 2021 – World Bank

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images 2020 10 23T153303.293 Lower oil demand may persist beyond 2021 – World Bank

The World Bank on Thursday said lower demand for crude oil may persist beyond 2021 .
It stated that while metal and agricultural commodities had recouped their losses from the COVID -19 pandemic and were expected to make modest gains in 2021 , energy prices , despite some recovery , were expected to stabilise below pre – pandemic levels next year .
Oil prices fell dramatically in the early stages of COVID -19 and have only partially regained pre -pandemic price levels .
Metal prices on the other hand , declined relatively modestly and have returned to levels that preceded the shock, according to the semi -annual Commodity Markets Outlook report, as stated by the bank .
The bank stated that agricultural produce prices were relatively unaffected by the pandemic , but the number of people at risk of food insecurity had risen as a result of the broader effects of global recession .
“ The impact of COVID – 19 on commodities has been uneven , and could have lasting effects for energy markets ,” World Bank Group Acting Vice President for Equitable Growth , Finance and Institutions and Director for the Prospects Group, Ayhan Kose , said.
He added, “ When declines in commodity prices are short -lived , policy stimulus can buffer their impact.
“ However, when prices remain depressed for an extended period , policymakers need to find solutions so their economies can adjust smoothly to a new normal .”
He stated that because of COVID – 19 , the new normal for oil – exporting emerging and developing economies arrived earlier.
Kose explained that in the post -COVID world , these countries need to be more aggressive in implementing policies to reduce their reliance on oil revenues .
The bank said oil prices were expected to average $ 44 per barrel in 2021 , up from an estimated $41 per barrel in 2020 .
It said demand was expected to rise only slowly as tourism and travel continued to be held back by health concerns and as global economic activity was anticipated to return to pre -pandemic levels only in the year after next.
It said supply restraint was expected to be eased steadily .
“ Energy prices overall , which also include natural gas and coal, are expected to rebound sizably in 2021 , following large declines in 2020 , an upward revision from April ’s forecast,” the bank said.

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Ban Tomato Importation – Dangote Tomato MD Tells FG

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images 2020 10 23T104030.892 Ban Tomato Importation - Dangote Tomato MD Tells FG

Ban tomato importation – Dangote tells FG
The Managing Director of Dangote Tomato Processing plant in Kadawa, Kano State, Abdulkarim Kaita has on Thursday called on the Federal government to ban importation of tomato paste like it ban rice importation into the country.
This was as he decried importation of tomato paste which he said was still thriving as the commodity was being imported from Cameroon and Cotonour in Benin Republic.
Kaita made the call while flagging off the distribution of tomato seedlings to 5,000 farmers under the Anchor Borrower of Central Bank of Nigeria on Thursday at Kadawa village in Kura LGA of the state.
The MD also dropped hint that plans are underway by the company to ensure that Nigeria is self sufficient and positioned to export tomato by establishing the biggest greenhouse in Africa which has the capacity to produce 350 million seedlings annually.
According to him, “We are appealing to the Federal Government to put a total ban on the importation of tomato like what it did to rice.
“The ban is necessary so as to boost local production of the commodity and ensure that Nigeria is self sufficient in tomato production.
“the ban on the importation of tomato paste would lead to the establishment of more tomato processing plants thereby creating job opportunities for many people in the country.
“The company had on several occasions visited the Customs Headquarters and met with the Controller General with a view to lodging complaint over the issue but nothing was done to check the ugly trend.
“It is only by putting a total ban on tomato importation that the government can encourage farmers to grow the commodity for the country to be self sufficient.
“The company was working with the Central bank of Nigeria under the anchor Borrower programme to provide tomato farmers with high yield seeds which will enable them to produce a minimum of 40 tons per hectare.
“Similarly, the company is putting a lot of effort to ensure that Nigeria is self sufficient in tomato production by establishing the biggest greenhouse in Africa which has the capacity to produce 350 million seedlings annually.
“There are 12 major tomato producing states in the country which if fully cultivated, in the next one year, Nigeria will be able to start exporting tomato.
“The greenhouse which is the largest in Africa, is established to provide tomato growers with high yield tomato seedlings in the country,” Kaita said.
In his remarks, the Chairman, Kano State chapter, Tomato Growers Association of Nigeria, Sani Danladi-Yadakwari commended the Federal Government for including tomato value chain in the anchor borrower programme noting that it would go a long way in boosting tomato production in the country.
Some of the items benefitted by the tomato growers include seedlings, fertilizer, water pump and other inputs.

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Fuel Scarcity Looms As Depots Stop Loading

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images 2020 10 22T134311.286 Fuel Scarcity Looms As Depots Stop Loading

The scarcity of petroleum products is imminent in Nigeria as some depots have stopped loading-trucks, The Nation learnt on Wednesday.
The Independent Petroleum Marketers Association of Nigeria (IPMAN ) National Vice President, Alhaji Abubakar Maigandi, disclosed this to our Abuja correspondent on phone.
He added that the #EndSARS protests and the resultant crises have stopped the marketers from transiting their loaded trucks.
According to him, since petroleum products are highly inflammable, the drivers decided to park their trucks in safe places nationwide.
He explained that since consumers buy fuel on daily basis and there is no replacement, there is bound to be a scarcity of petroleum products.
Maigandi further said the marketers do not hoard products so there will be no reservoirs to turn to upon the exhaustion of available stock.
Asked whether there is any fear of scarcity, he said “definitely, because some of the depots are not loading due of insecurity.
“The ones that have already loaded parked their trucks in the yards so that protesters will not set them on fire. There is no way you can have sufficient fuels in the filling stations because we don’t do hoarding.”
The IPMAN National Vice President urged the protesters to dialogue with the Federal Government for the amicable resolution of the crises.
He asked them to embrace the olive branch because of the economic losses that emanate from the crisis.
His words: “The EndSARS issue is a Nigerian issue so the protesters and government should dialogue over it for a lasting solution. Nigerians (both government and the governed need to have attitudinal change. So, it is better to dialogue. “

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