Paystack's YC Application (W2016) - Building Africa's Stripe
Company Overview
Progress at Application
Founder
Shola Akinlade
Co-founder & CEOBuilt payments infrastructure for banks, founded first startup in 2010
Full-time
Key Strengths
Paystack's application demonstrated deep domain expertise, strong market understanding, and impressive early traction in a challenging market.
Application Deep Dive
Describe your company in 50 characters or less.
APIs and tools to enable merchants accept payments in African Markets
Clear Value Proposition
Concise description focusing on key value (enabling payments) and market (Africa)
What is your company going to make?
Software and services needed for merchants in Africa to accept online payments from local and international customers. We provide a full stack APIs and we'll securely collect, encrypt, transmit and store customer card information in a highly protected vault and offer continuous anti-fraud and charge back protection services. To make these happen we've partnered with Access Bank (the third Largest Bank in Nigeria) and we've built a PCI Compliant payments infrastructure and APIs.
Comprehensive Solution
Outlines complete payment stack including security, compliance, and partnerships
Strategic Partnerships
Highlights key banking partnership demonstrating institutional backing
How far along are you?
Private Beta. We are piloting with a dozen merchants and we have hundreds of merchants on our waiting list.
Market Validation
Shows strong demand through waitlist without marketing
Do you have revenue? How much revenue?
$1,300
Early Revenue
Shows ability to monetize even in early beta stage
What is your monthly growth rate?
We are currently growing our waiting list at 10x, and transaction volume at 15x.
Rapid Growth
Exceptional growth in both users and transactions without marketing
Why did you pick this idea to work on? Do you have domain expertise in this area? How do you know people need what you're making?
When i founded my first startup in 2010, we needed a way to accept payments online, there was no solution locally, we had to work around using Avangate BV and creating accounts in the UK. 5 years later, there's still no easy way. I spent the entire 2014 implementing payments and disbursement solutions for Banks and i realized that most of the infrastructure needed to build a full stack payments API already existed, and it just needed someone to do the hardwork of putting it all together and doing all that is necessary. The demand for Paystack is amazing, we haven't done any PR or Marketing and we're growing our waiting list at 10x monthly, just from word of mouth.
Founder-Market Fit
Personal experience with problem combined with professional expertise
Market Validation
Strong organic demand validates market need
What's new about what you're making? What substitutes do people resort to because it doesn't exist yet?
What's new? In Nigeria.. there's still no way to accept recurring payments or one click payments. The incumbents are big co's owned by banks and are not interested in innovating. Substitutes, creating US or UK companies so they can use UK or US payment processors and then find ways to send the money back.
Market Gap
Identifies specific missing features and incumbent limitations
User Pain Points
Highlights complex workarounds users currently employ
Who are your competitors, and who might become competitors? Who do you fear most?
We have 3 types of competitors: (1) Local Financial Institutions (2) Global Payment cos and (3) Local non-Financial Institutions. Local FI's are not able to progress because they mostly buy white label solutions. Global companies like Stripe and Braintree are competitors but it will be difficult for them to meet the needs of the African Merchants. It's easy for them to offer Bitcoin or Apple Pay integration but what about Verve Cards (a pan African card scheme), or Mobile Money or other local card schemes?
Competitive Analysis
Clear segmentation of competitor types with specific limitations
Local Advantage
Highlights importance of local market knowledge and integrations
What do you understand about your business that other companies in it just don't get?
Well, we're firstly developers, then business owners, and merchants so we can feel the pain from a developer and merchant perspective. every other person right now seems to be more interested in their vested interests.
Multi-perspective Understanding
Team combines technical, business, and user perspectives
How do or will you make money? How much could you make?
Transaction fees. 1.9% + 50cents
Simple Revenue Model
Clear, straightforward pricing similar to global standards
How will you get users?
We're already getting users by word of mouth. We're active in the local developer community, we'll reach out to merchants directly, and we'll signup merchants via integration with existing services (Shopify, eventbrite, woocommerce) Our banking partner has also asked that we onboard thousands of Merchants that are their customers.
Multi-channel Growth
Combines organic growth with strategic partnerships and integrations
Please describe the breakdown of the equity ownership in percentages among the founders, employees and any other stockholders.
Shola — 80% Employee Pool — 10% Advisory Pool — 10%
Equity Structure
Clear allocation with significant pool for employees and advisors