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Paystack Stripe: Stripe Pays Over $200 Million to Acquire Nigerian Paystack Startup

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Stripe Acquires Paystack for Over $200 Million

Stripe, American financial services, and online payment processing for internet businesses headquartered in San Francisco, California, United States, is in the process of acquiring Paystack, a Nigerian based online payment processing startup.

While the terms of the deal are not in the open, sources familiar with the deal said Stripe is paying over $200 million to acquire the Nigerian startup.

Paystack presently has about 60,000 customers that cut across small businesses, fintechs, schools, online betting companies and larger corporations. The sources said the plan will be to continue operating independently in Nigeria and the rest of Africa. Suggesting this is one of the reasons Stripe raised $600 million in funding earlier this year to expand its API-based payments services into more regions.

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.”

Shola Akinlade, the CEO of Paystack said the deal will help the company expand in Nigeria and beyond. “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.

The deal is expected to boost the attractiveness of Nigerian startups, especially the fast-growing fintech industry.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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FinTech Investments in Q3 2020 Drop by 16% Quarter-over-Quarter to $12.15 Billion

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Fintech

The total value of fintech investments worldwide fell by 16% quarter-over-quarter (QoQ) to $12.15 billion in Q3 2020. However, deal volume grew by 26% to 716 deals.

According to the research data analyzed and published by Comprar Acciones, the United States accounted for 64.7% of the total deal value, with 340 deals worth $7.85 billion.

Also, there were 25 mega-rounds during the period, accounting for 60% of the total funding value. Compared to Q2 2020, the total mega-rounds value increased by 64% to $6.4 billion, as non-mega rounds fell by 16%.

Payment Industry Deals Soar by 41% to $6.22B as InsurTech Grows by 63% to $2.5B

Payment industry deals took center stage, totaling $6.22 billion according to Global Data, marking a 41.9% QoQ increase.

The top five deals in the segment accounted for 58.4% of the total. Klarna bank had the highest raise, at $650 million at a post-money valuation of $10.65 billion. It made it the highest valued private fintech in Europe and the fourth highest globally.

Klarna, which is a buy now, pay later app, had 12 million monthly active users and 55,000 daily downloads. In H1 2020, its global transaction volume shot up by 44% YoY to $22 billion as revenue soared by 36% YoY to $466 million.

On the other hand, the insurtech sector raised $2.5 billion globally across 104 deals according to Willis Tower Watson. It marked a 63% increase in funding value and a 41% growth in deal volume. The number of mega-round deals in the segment increased by 50% QoQ.

Six mega-rounds drove 69% of the total insurtech funding. Top on the list was Bright Health with $500 million and another $500 million by Ki. Early stage companies in the sector grew by 57% QoQ during the period, compared to a record low of 42% in Q2 2020.

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World’s Richest Man Jeff Bezos Backed African Fintech Startup, Chipper Cash

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The world’s richest man, Jeff Bezos, has invested in an African fintech start-up, Chipper Cash, according to the latest report from Tech Crunch.

Chipper Cash, a startup that helps facilitate money transfer across Africa and beyond, raised a $30 million Series B funding round led by Ribbit Capital with participation from Bezos Expeditions, a personal VC fund of Jeff Bezos, the founder and CEO of Amazon Inc.

Chipper Cash currently has 3 million users on its platform and processes an average of 80,000 transactions per day. The startup operates in the following seven African countries; Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya.

According to Ham Serunjogi, the Chief Executive Officer, Chipper Cash, the company attained a monthly payments value of $100 million in June 2020.

As part of efforts to grow beyond its current market, Chipper Cash plans to expand its product and geographical reach. In terms of product, the company plans to add cryptocurrency trading options and investment services.

We’ll always be a P2P financial transfer platform at our core. But we’ve had demand from our users to offer other value services…like purchasing cryptocurrency assets and making investments in stocks,” Serunjogi stated on the phone.The fintech company recently added beta dropdowns to its website and mobile application to enable customers to buy and sell Bitcoin and even invest in United States stocks from Africa. It partners DriveWealth, a U.S financial services company, to allow stock trading.

We’ll launch [the stock product] in Nigeria first so Nigerians have the option to buy fractional stocks — Tesla shares, Apple shares or Amazon shares and others — through our app. We’ll expand into other countries thereafter,” said Serunjogi.

On the financial service side, Chipper Cash plans to offer more API payments solutions. “We’ve been getting a lot of requests from people on our P2P platform, who also have business enterprises, to be able to collect payments for sale of goods,” explained Serunjogi.

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Top Four Social Networks Boast 8 Billion Active Users in Q3 2020

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In Q3 2020, Facebook inched closer to becoming the first social network with 3 billion users. Based on the research data analyzed and published by Comprar Acciones, it had 2.74 billion monthly active users at the end of September 2020, up by 12% year-over-year (YoY).

Facebook was the most popular social networking platform. YouTube and WhatsApp followed with 2 billion users each, while Messenger was third with 1.3 billion. In total, the four had a cumulative 8 billion users.

Facebook Family User Base Grows to 3.21 Billion in Q3 2020

During the period, Facebook also had a 12% quarter-over-quarter (QoQ) increase in the total number of its daily active users (DAUs), to reach 1.82 billion. Asia Pacific led in DAUs, going from 699 million in Q2 to 727 million in Q3 2020. Europe remained flat at 305 million, while the US & Canada dropped from 198 million to 196 million.

In terms of monthly active users (MAUs), Asia Pacific was also the top market with 1.17 billion users. Europe followed with 413 million, while the US & Canada had 255 million.

In the same period, the Facebook family of apps had a total of 3.21 billion users globally. Of its messaging platforms, WhatsApp was the most popular with 2 billion monthly users in October 2020. Facebook Messenger was second with 1.3 billion monthly users.

On the other hand, YouTube reported that its Premium and Music services had 30 million paid subscribers in Q3 2020. The number had doubled in less than 18 months as it only had 15 million paid subscribers in May 2019.

According to Sensor Tower, Youtube was the second highest grossing mobile app in Q3 2020 across both Google Play Store and Apple App Store. During the period, its revenue increased by 59% YoY. On the other hand, Facebook came in second on the list of top mobile apps by downloads, in spite of a 2% YoY drop.

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