Ladies and gentlemen, a member just shared a post I wrote in 2018, predicting that Stripe would acquire Paystack. Here is the piece: ”My Lord, what are you doing? Payment. Payment. Payment. Yes, I have mashed the words of Lord Polonius and Hamlet in Shakespeare’s Hamlet for the state of payment startup in Africa. Today, it is Lagos-based Paystack which added $8 million, bringing its total to $10 million. Visa, Stripe (hello, future acquisition) and Tencent are some of the backers”. People, many things are evident. Congratulations to Paystack again.
The $200 million deal is huge and hopefully, with Stripe, more friction can be reduced in the payment sector. The opportunities are massive because the challenge of digitizing that $301 billion remains. According to Mastercard and the Fletcher School, only 2% was already digitized in the “$301 billion of funds flow from consumers to businesses in Nigeria” as at February 2018. I do think, just about 5% might have been peeled off now. So, the castle remains. If you scale the mission of Paystack to Africa, you have $trillions of opportunities.
According to research done by The Fletcher School and Mastercard, of the $301 billion of funds flow from consumers to businesses in Nigeria, 98 percent is still based on cash.
As we celebrate Paystack one thing is evident: the best technology startups today are API-based startups. They deliver better multiples across most domains. Largely, these are massively scaling companies which deliver their services via application programming interfaces (API). They are winning and they are business models to pay special attention right now. Paystack is an API-based company.
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Simply: a high-growth company that delivers its main service via an application programming interface, or API.
APIs help services communicate with other apps, allowing them to execute tasks or request information quickly and easily. These services are sometimes highly valuable because they can offer something complex and difficult, easily and simply.
If you are looking for inspiration on a technology mission, consider building an API-based company. It is the hottest thing in the world of tech right now.
Paystack Is The Most Successful Nigerian Tech Startup on Large Value Creation for Investors
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And the prediction came to pass…
But before folks rush into creating API based tech firms, they first need to have clarity on the friction they would be fixing, before they start wondering what went wrong.
The correct sequence is identifying the problem, then building a probable solution; never about building a probable solution, only to start looking for the problem to fix. The latter often ends in tears.
Nice insights.