Paystack is a payments company that enables African businesses to accept payments from customers through multiple methods. Founded by Shola Akinlade, Paystack recently raised $8 million from Stripe and Visa. Paystack's YC application was initially rejected but they became the first Nigerian company to be accepted into Y Combinator. Paystack's growth strategy focuses on successful transactions and a positive customer experience. They are expanding to other African countries and actively seeking senior engineers. Paystack highlights the benefits of joining Y Combinator as a Nigerian company, including access to a diverse network and resources for growth. The Nigerian fintech space has gaps that need to be addressed, and Paystack aims to incentivize more businesses to adopt digital payment systems. Building for Africa offers opportunities due to the young and active population and increasing access to technology. Paystack aims to help African businesses solve their payment problems and support successful companies in Africa.
What is Paystack?
Paystack is a payments company that enables African businesses to accept payments from customers through multiple methods.
- Launched in January 2016
- Currently operating in Nigeria
- Plans to expand to other markets
Shola's background and previous company
Shola Akinlade, a computer science graduate from Lagos, Nigeria, started his own company called Peculiar, a cloud storage platform for emerging markets. After realizing the need for better payment processing in Nigeria, he founded Paystack. Despite initially being rejected by Y Combinator, Paystack became the first Nigerian company to be accepted into the program and recently raised $8 million from Stripe and Visa.
- Shola Akinlade grew up in Lagos, Nigeria and studied computer science in college.
- He worked at Anakin, a beer company, for two years before starting his own company, Peculiar.
- Peculiar was a cloud storage platform similar to Dropbox, but targeted towards emerging markets.
- Shola started building software for banks in Nigeria and saw the need for improved payment processing.
- He founded Paystack and spent a year gathering feedback from potential customers.
- Shola's friend introduced Paystack to Y Combinator (YC) founders, including Michael Seibel.
- Paystack became the first Nigerian company to be accepted into Y Combinator.
- Paystack recently raised $8 million from Stripe and Visa.
Paystack's YC application
Paystack's YC application: A Nigerian company's unexpected acceptance into Y Combinator
- Shola Akinlade, co-founder of Paystack, discusses their surprising acceptance into Y Combinator (YC)
- Initially, Shola didn't expect a Nigerian company to be accepted into YC, but he realized that YC is focused on finding the best companies globally
- Paystack's application was simple and focused on their vision, which remains unchanged since their application
- They have made progress in addressing the broken payments system
- Shola met Ezra, the co-founder of Paystack, through a mutual friend.
Meeting his cofounder
Meeting his cofounder: Shola Akinlade and Ezra's journey to building Paystack
- Shola Akinlade reached out to Ezra, his former roommate, to join him in building a payments company
- Ezra had previous experience in the payments industry, making him a valuable addition to the team
- Shola pitched his idea to Ezra, who shared the same vision and agreed to join him
- They started working together in January 2016, leading to rapid progress and improvement of Paystack.
Interviewing at YC
- The interview process at Y Combinator (YC) involves meeting with various companies working on different projects
- During the interview, the speaker discussed their own company, Paystack, which simplifies the payment process
- YC advised the speaker to remove artificial barriers to growth, addressing concerns about fraud
- The speaker received a call in the evening offering advice, which they found exciting
Joining YC as a Nigerian company
Joining Y Combinator as a Nigerian company offers opportunities for diversity and growth in the startup scene. Key points include:
- Shola Akinlade, co-founder of Paystack, highlights the benefits of joining Y Combinator as a Nigerian company.
- The startup scene in Nigeria is not significantly different from other countries.
- Joining Y Combinator provides access to a diverse network and resources for growth.
Differences between startups in Nigeria and the US
The most profound aspect of the topic is the differences between startups in Nigeria and the US.
Key points:
- Startup founders in the US are younger and more connected.
- Quality advice in the US emphasizes building something impressive to network effectively.
- Long-term view and patience are important in building a startup.
Nigeria's payments market
Nigeria's payments market is rapidly evolving, with digital payments expected to dominate. Key points include:
- Less than 2% of consumer spending is currently done through cards.
- Online transactions are increasing, indicating a shift towards digital payments.
- Companies like Buy Power are enabling digital payments for services like electricity, enhancing convenience for consumers.
- Smartphone adoption and mobile penetration are on the rise, creating a favorable environment for digital payments.
- Paystack is simplifying the payments infrastructure, making it easier for businesses to accept digital payments.
- Paystack aims to incentivize more businesses to adopt digital payment systems.
Paystack's growth
Paystack's growth strategy revolves around successful transactions and a positive customer experience. They have implemented an automated dispute process and are building a community for their merchants. Paystack serves a diverse range of businesses and has achieved consistent growth by ensuring platform effectiveness. They experienced substantial growth from Q1 2016 to Q4 2017 and are expanding to other African countries.
Expanding to other countries and hiring
Expanding to other countries and hiring is a key focus for Paystack, an African payment platform. They are actively seeking senior engineers to address the challenges they face in expanding to different African countries. Paystack aims to build the best talent in Africa and set a standard for engineering culture. They are open to hiring individuals from anywhere in the world and are willing to learn and overcome the obstacles of international expansion. Key points include:
- Paystack's expansion plans and the need for experienced individuals to navigate the local context.
- The company's goal to build the best talent in Africa and set a standard for engineering culture.
- The challenges they face and the importance of finding the right expertise to solve problems.
- Paystack's willingness to learn and overcome the obstacles of expanding internationally.
The best part of doing YC
The best part of doing YC is the supportive community and the ability to learn from and connect with other entrepreneurs.
- YC provides a valuable network for advice and assistance.
- The community allows for conversations and discussions.
- YC helps in finding and recruiting the best engineers locally.
Shola Akinlade of Paystack hopes to find the right people to take on the challenge of building businesses in Africa, particularly in payments infrastructure. He offers his experience and assistance to those interested in building for African businesses. The goal is to solve problems and help businesses thrive.
Crypto developments in Africa
Crypto developments in Africa have seen significant growth, particularly in less developed markets like Nigeria. Despite an evolving regulatory framework, there is a surge in trading activity. Many Nigerians are eager to enter the crypto space and seek guidance on how to begin.
- Africa experiences notable growth in crypto developments, especially in less developed markets.
- Nigeria witnesses a surge in trading activity despite an evolving regulatory framework.
- Many Nigerians express interest in entering the crypto space and seek guidance on how to get started.
Creative Joe asks - How difficult is it to get into YC?
- Getting into Y Combinator (YC) is not as difficult as it may seem
- The process selects the right people who have all the necessary components for success
- The key is to clearly and impressively explain your business and ensure that others can understand it.
Educating US investors
Educating US investors about investing in African businesses:
- Y Combinator attracts sophisticated investors who know the right questions to ask, even without local context.
- Founders should focus on building their businesses to easily take advantage of opportunities.
- The goal is to make something right, not to find shortcuts or cheat codes.
Paul Israel asks - What gaps do you think still exist in the Nigerian fintech space?
- Gaps in the Nigerian fintech space need to be addressed
- Opportunities for credit scoring and a cash app
- No clear winner in any financial service sector, indicating multiple opportunities for startups
Nelson asks - Are there any conventional startup advice that did not work for Paystack as their target market is Africa?
Paystack, a startup targeting the African market, found conventional startup advice to be ineffective. Despite the challenges in fundraising and facing skepticism, the mindset is changing with more support for problem-solving teams. Paystack and other barrier-breaking companies are paving the way for others to succeed.
Nelson asks - What are some important lessons he learnt while building Paystack?
- Importance of having a strong team and finding people better than oneself
- Utilizing the available ecosystem to solve problems
- Timing fundraising efforts correctly can lead to successful outcomes
Nelson asks - What are some applications he would love to see been built on top of Paystack?
Shola Akinlade of Paystack wants to see applications built on top of Paystack, including expense management for businesses and industry-specific payment solutions like pizza delivery. Many startups already exist in the market, but may not be executed at the same scale as in the United States.
Building for Africa
Building for Africa is an exciting opportunity due to the young and active population, increasing access to technology, and overcoming infrastructure challenges. Key points include:
- Africa has a young and active population with increasing access to phones and technology.
- Infrastructure challenges, such as roads and transportation, still exist but companies are finding ways to overcome them.
- The payments and logistics layers have been figured out, making it easier to build on top of these foundations.
Nestor Ezeagu asks - Do you think something like GoFundMe could work in Nigeria?
- The topic is whether a platform similar to GoFundMe could be successful in Nigeria.
- There are already multiple sites in Nigeria, such as Donates.ng, that function similarly to GoFundMe.
- The speaker believes that such a platform could work in Nigeria.
- They mention the example of receiving payments on an MVP e-commerce platform as evidence of this.
Car Joyy asks - Can I receive payments as an MVP ecommerce site before registering as a company?
- With the introduction of the BVN, individuals can connect their personal checking accounts to accept payments for an MVP ecommerce site.
- There is a limit to the amount that can be accepted before registering as a business.
- A startup business program allows businesses to register with their personal details.
Achyut Shrestha asks - What’s your tech stack?
- Paystack's tech stack includes Node.js for backend, Vue.js and Angular for frontend, and Python for certain services.
- Node.js is the primary technology used for backend development.
- The tech stack is hosted on AWS.
- Vue.js and Angular are utilized for frontend development.
- Python is used for specific services.
Jordan Jackson asks - What are the biggest cultural differences that you account for in UX and product design?
The biggest cultural difference that Paystack accounts for in UX and product design is the varying levels of familiarity with online payments. They use affordances like tool tips and diagrams to guide users through the process. They also consider factors like internet speed. In Africa, designing for everyone becomes a challenge due to the diverse tribes and languages. However, they are excited about the opportunity and are willing to put in the work to figure it out.
Shola's outlook
Shola Akinlade, co-founder of Paystack, is excited about the progress his company has made in the past five years. With a strong team, financial support, and regulatory cover, there are no more excuses. He emphasizes the importance of building without any excuses and finds solace in traveling for work to switch off and rest.
Key points:
- Paystack has made significant progress in the past five years
- Shola highlights the absence of excuses with a strong team, financial support, and regulatory cover
- He emphasizes the need to focus on building without any excuses
- Traveling for work helps him stay sane by allowing him to switch off and rest.
What he misses about life before Paystack
The speaker misses building deeper relationships and spending more time with people. He also mentions not having much time for exercise or dating due to work. However, he recognizes the importance of his health and takes breaks when needed. He finds the question about personal and Paystack's growth in five years interesting but doesn't provide a specific answer.
Paystack in five years
In the next five years, Paystack aims to help African businesses solve their payments problems and support successful companies in Africa. The speaker wants to see Paystack powering and supporting these businesses and be a part of their success. Personally, the speaker's goals are aligned with the company's goals and they want to contribute to creating opportunities for a new generation of people.
- Paystack aims to help African businesses solve their payments problems
- Paystack wants to support successful companies in Africa
- The speaker wants to see Paystack powering and supporting businesses
- The speaker's goals are aligned with the company's goals
- The speaker wants to contribute to creating opportunities for a new generation of people.
Music recommendations
- The speaker discusses their inspiration from Nigerian music and a YouTube channel called Analog Africa
- They mention the festival scene in Africa and an African Burning Man event
- The speaker invites people interested in working for their company to reach out to them via Twitter or email.