Digital payments startup Paystack has lapped up $8 million in its series A funding round. Reports say the Nigerian fintech venture secured its latest round of financing from a group of investors led by payments company Stripe and Visa. There’s also been support from Tencent and Y Combinator, both of which had contributed to an earlier $1.3 million seed funding for the startup in 2016.
Paystack has remained on the radar of fintech observers since its admission into Y Combinator’s silicon valley based startup incubator two years ago- the first Nigerian venture to achieve this. That breakthrough, widely reported at the time, came at the start of a boom in the country’s fintech space.
Today, Paystack is one of Nigeria’s leading digital payment platforms. The platform is now preferred by over 17,000 businesses and processes $20 million in online financial transactions every month- about 15% of all digital payments recorded in the country. Its founders, Shola Akinlade and Ezra Olubi, say that their venture is helping to strengthen the country’s once shaky online financial transaction systems.
Their work is certainly getting the attention of the world’s investors. The sentiment being expressed in global venture capitalist circles is that startups like Paystack represent a big opportunity for generating huge returns. As the North American and European fintech markets get saturated, developing regions are becoming attractive destinations for investors seeking fast growing returns.
Paystack’s services are targeted at businesses of all sizes. Its larger scale clients include a telecoms giant, a pizza delivery chain, and a ride-hailing company. But its users are predominantly SMEs.
Merchants deploy Paystack’s solutions on their e-commerce platforms in order to help them collect and receive payments digitally. It also helps them set and monitor customer subscriptions. Using its APIs, developers are able to create a range of financial service products for a large number of customers.
Recently, Paystack launched its Starter Business for entrepreneurs, which lets entrepreneurs access its payments services without having formal business registration or corporate bank account.
With extra funding at its disposal, Paystack is looking to spread out beyond Nigeria into other parts of Africa. While there’s some degree of competition among fintech companies already taking shape in parts of the continent, Paystack could find that region’s largely untapped potential for digitally driven commerce plays in its favour.
This year has been a good one for Nigerian fintech. Startups in the space got a large fraction of investor funds in the first half of the year; some of them include Piggybank’s $1.1 million seed funding, and Lidya’s $6.9 million, secured from its series A round. In August alone, at least five fintech startups have announced funding successes; asides Paystack, there’s been investor support for Mines, Allpro, Thank U Cash, and Wallet.ng.
Feature Image: paystack.com