In the midst of all the gloom in Nigeria, technology entrepreneurs in the region are an inspiration to many other African tech entrepreneurs. When African technology history books are written about financial technology (fintech), Shola Akinlade and Ezra Olubi will feature prominently. They are both co-founders of Paystack, an African (Nigeria) fintech company that has been acquired by Stripe, one of the leading fintech companies in the world. Their story is unique and inspirational in a tough environment for African tech startup founders.
In 2015, the company had only $1300 in its bank account when Akinlade applied to be accepted by the elite accelerator startup programme, YCombinator, in the US. This factor alone should have been a hurdle for a Nigerian tech startup to be considered for this programme, but Akinlade, who was the only founder at the time, was so convinced about the viability of his solution that he applied despite the minimal revenue of the company.
Paystack became the first Nigerian company to be invited to join the famous Y Combinator Accelerator programme. Currently, Paystack has 60 000 customers and has just been acquired for what is believed to be close to $200 000 based on current media reports and people close to the firm.
When Akinlade founded his first startup in 2010, he needed a way to accept payments online, there was no solution locally, he had to work around using Avangate BV and creating accounts in the UK. 5 years later, there was still no easy way. This is what gave birth to Paystack. According to him, global companies would have difficulty in meeting the needs of African merchants. They would have difficulty in developing solutions that address local needs. This is what makes Paystack unique. It focused on solving a local challenge and this is what attracted Stripe to this African fintech startup.
Stripe is considered a company that builds economic infrastructure for the internet for businesses to accept payments and manage their businesses online.
Currently, Stripe is not operational in the African continent as a result local businesses cannot enjoy the benefits that come with Stripe. This is one of the reasons why Paystack acquisition matters for the continent. It creates a platform for Africans to use the tool, in the long run, to make payments and thereby participate in the global internet economy without friction caused by payment infrastructure. The beauty of the Stripe/Paystack deal is that it will enable Stripe to broaden its reach to the continent using a locally built technology. In addition to this, the fact that Paystack is led by Africans as opposed to some Africa based startups that are led by founders from outside the continent is a reason for celebration for many African tech founders.
The tech industry is known for backing Africa based startups that are led by founders from the US, Europe, and other parts of the world. It is rare to find truly African tech startups rising the way Paystack has risen.
The Paystack deal is a major development in the African technology ecosystem. It partly means that Africans will participate in the development of the internet financial infrastructure. In a perfect world, it would have been better for Paystack to grow and become a fintech giant of the continent as opposed to being acquired by an American fintech company. This situation is ideal for now, in the future local technology tech ecosystem should work towards developing local giants that are fully funded and owned locally.
Wesley Diphoko is the Editor-In-Chief of Fast Company (SA) magazine.