mehn…these guys have it made. Congrats shola and Ezra
Nice one. I’m going to go out on the limb and assume a pre-money valuation of $32m, which will give a post-money valuation of $40m or ₦14.4bn. Probably (and should be) a lot more. The founding team should still own at least 25% by this point. Optimistically 40%.
Beer parlour guessing aside, onto serious matters. It’ll be good if Paystack can weigh in and provide some high-level guidance on what the new raise portends.
- New integrations? Probably not needed
- Further expansion outside Nigeria? About time
- Establishing a mobile agent network? Hmm… ambitious strategy if accurate but be careful. Here, there be dragons.
Whichever way you go, godspeed to your team.
The techcrunch article says they are expanding into Ghana. I’m not sure a mobile agency network is the way to go for them they are already dominating the e-commerce payment gateway sector. The spoils seem to have been shared between them and Flutterwave in this space.
Mobile Money is a different kettle of fish.
Is this the first thing that came to your mind?
By the way, I sent you a DM. At least acknowledge you saw it pls. Thanks.
No, the first thing that came to my mind was the dinner I had with some of their tech team a long while ago in a faraway land. Watching their rapid development over time brings warmth to my heart.
The second thing is the pressure a new raise often brings. Contrary to what some may think, new money brings new, deeper scrutiny, larger targets, and a whole lot of new responsibility. Paystack will be fine though.
My apologies for the tardiness. I’ve replied to it.
Awwww yeah!!! This is gaining traction, and I’m so proud of these guys. Making payments simple to integrate for merchants, and payment options for customers… that’s what the market has been looking for for years.
I chuckled a bit when I read this section of the tech crunch article:
“Akinlade said that the total amount processed monthly at Paystack is now at over $20 million — which in larger global terms is still a very small amount of money, and even less so when you consider that what Paystack makes on those transactions is just 1.5 percent.”
So I did some mental math: $300,000 per month in revenue. Don’t know what the burn rate is, but this startup appears profitable already. This is a fantastic milestone for any small business. If the bulk of their cost is in Naira (e.g. office space and staff), then they’re in a very good place.
Keep it up, just hope they’ll have time to drop by radar and say hi once in a while
One thing I’ve always wanted from payment processors: anonymous mobile payments. This allows me to sms like 500naira up to 10k to a merchant without revealing my banking identity, while avoiding cash (which already provides the anonymity we seek sometimes)
Payment industry is all about getting a few big clients and you’re made. Knowing how Africa works, a lot of that $8 million will go towards bribing connected people for payment deals. Not judging though.
Awsome. But Paystack have bluntly refused to enable muti-currency for its customer. They have been promising us that soon we can get settled in dollar i quote “And soon, you’ll be able to get settled in USD” when would this happen.
It’s out of their hands, thanks to CBN’s policy.
Notwithstanding the CBN regulations, they should be able to settle you in forex but at a premium cost to the merchant.
This is good news for the Paystack team. Absolute no brainer for investors. Fintech investment (whatever form it comes) is probably one of the safest investment you can make in Africa right now. The only downside of these foreign investments coming to Nigeria is that, in a few years’ time, Paystack core team will be rich, investors will be happy, IPO will be hard, Nigerians will start complaining - the same way they complain about MTN stealing their money but can’t do much about it. Slavery continues. History repeats itself but we do not learn. This time around, the Youths are in charge not the King’s and Emirs.
At that level, investors want 7x return minimum. They probably took somewhere around 30% of the company, hence the current valuation is $32m post money. Do you honestly see Paystack selling or IPOing for over $200m? Not likely. Best case scenario here is that the founders took some good money off the table as part of the investment agreement, but they put the company on the wrong path here. I can bet in 2-3 years we will be hearing of mass layoffs at Paystack after aggressive targets were not met.
This is a very distinct and very likely possibility. If we assume that they indeed are earning $300k per month, then at a PE ratio of 10, their valuation will be approximately $36mln, which is close to your estimated post-money valuation.
If they grow at 30% year-on-year, which is definitely possible in a rapidly industrializing Africa, their earnings will increase to $13mln, and with a PE of 15, they will be past your $200mln goal post.