Paystack is a payments company that helps merchants in Africa accept payments from their customers. They launched in Nigeria in January 2016 and are now expanding into other markets. The founder previously worked at Heineken and started a company called Picoeo. Paystack recently raised a series A funding round of $8 million from Stripe and Visa. They applied to Y Combinator and were accepted, becoming the first Nigerian company to join the program. The founder met his co-founder at Babcock University and they have been working together on Paystack since its inception. The YC interview went well and they received an investment offer from YC. The founder describes the experience of being part of the YC program as exciting and beneficial.

- The speaker didn't feel out of place at Y Combinator (YC) and noticed a lot of diversity among the participants.
- The startup scene in Nigeria differs from YC in terms of the age of founders and the quality of advice.
- In Nigeria, cash is still the dominant form of payment, but online transactions are growing.
- Paystack is focused on simplifying payments and providing a good customer experience.
- The company aims to build a community around its merchants and help them start and scale their businesses.
- Paystack serves a range of businesses, from startups to airlines and tax collections.
- The company's growth has been driven by making payments work and its customers' own growth.
- Paystack plans to expand to other African countries based on demand and the belief that its solution can work in different markets.

- The speaker shares a story about their experience in Cairo, Egypt, and the challenges they faced with language barriers when using ride-sharing services.
- They discuss the importance of finding the right people to help navigate the complexities of expanding to new countries.
- The speaker talks about the growth of their team and the need for senior engineers to solve problems and optimize their systems.
- They express their goal of building the best talent in Africa and the importance of learning from experienced individuals from around the world.
- The speaker mentions the idea of creating a bootcamp to upskill local engineers and the challenges of finding experienced engineers in Africa.
- They highlight the support and helpfulness of the YC community.
- The speaker discusses the potential of cryptocurrency in less developed markets, noting that trading activity is high but the right use cases are still being formed.
- They address questions from Nigerians, including the difficulty of getting into YC.

- The speaker believes that getting into YC (Y Combinator) is easy if you have the right components and can clearly articulate the value of your business.
- They mention the need to educate US investors about the market in Nigeria, but believe that YC is a sophisticated investor that knows the right questions to ask.
- The speaker emphasizes the importance of focusing on building a great business and making something people want.
- In the Nigerian fintech space, there are still opportunities in credit scoring and the absence of a cash app or Venmo equivalent.
- Conventional startup advice has been useful for Paystack, as building a business is hard everywhere.
- The speaker mentions the changing mindset towards Nigerian startups and the availability of resources and support.
- Important lessons learned while building Paystack include the value of having a strong team and leveraging the ecosystem.
- Paystack would like to see P2P payments and an expense management solution built on top of their platform.
- In terms of the market in general, most startups already exist in some form, but there may be opportunities in areas like phones or games.
- The speaker believes it is an exciting time to build for Africa due to its young population.

- Nigeria's population has grown rapidly over the past few decades, while Italy's population has remained relatively stable.
- The market in Nigeria is expanding, with advancements in payments and logistics infrastructure.
- Nigeria is experiencing a boom in tech startups and innovation.
- There are cultural differences to consider in product design and user interface, such as language and payment preferences.
- Paystack, a Nigerian payment platform, has adapted its services to accommodate different payment methods, including bank accounts and USSD codes.
- The founder of Paystack is optimistic about the future and the potential for growth in Nigeria's tech industry.

- The speaker sleeps during flights to combat jet lag.
- They miss having deeper relationships and hope to spend more time with people.
- They prioritize work but recognize the importance of their health and sometimes need to tap out of meetings.
- In 5 years, they want Paystack to support and power successful businesses in Africa.
- Their personal goals are tied to the company's goals.
- They recommend African artists such as Wizkid, Davido, and Savage.
- The speaker gets inspired by listening to music and mentions a YouTube channel called Analog Africa.
- They are open to people reaching out to them for job opportunities.

- Paystack is a Nigerian payments company that helps merchants accept payments from customers.
- They recently raised $8 million in funding from Stripe and Visa.
- Paystack is focused on simplifying payments and providing a good customer experience.
- They aim to build a community around their merchants and help them start and scale their businesses.
- Paystack serves a range of businesses, from startups to airlines and tax collections.
- They plan to expand to other African countries based on demand and the belief that their solution can work in different markets.
- The speaker discusses the challenges and opportunities of expanding to new countries.
- They emphasize the importance of finding the right people and building a strong team.
- The speaker believes it is an exciting time to build for Africa due to its young population and growing tech industry.
- Paystack has adapted its services to accommodate different payment methods in Nigeria.
- The founder is optimistic about the future and hopes to support successful businesses in Africa.

Shola Akinlade - https://twitter.com/shollsman - is CEO and cofounder of Paystack - https://paystack.com/. Paystack helps businesses in Africa get paid online and offline. They’re based in Lagos, Nigeria and were part of the Winter 2016 batch.

The YC podcast is hosted by Craig Cannon - https://twitter.com/craigcannon

***

Topics

00:00 - What is Paystack?

00:40 - Shola's background and previous company

4:00 - Paystack's YC application

5:35 - Meeting his cofounder

7:00 - Interviewing at YC

9:55 - Joining YC as a Nigerian company

10:30 - Differences between startups in Nigeria and the US

13:00 - Nigeria's payments market

15:30 - Paystack's growth

19:00 - Expanding to other countries and hiring

25:00 - The best part of doing YC

29:00 - Crypto developments in Africa

29:55 - Creative Joe asks - How difficult is it to get into YC?

30:30 - Educating US investors

31:40 - Paul Israel asks - What gaps do you think still exist in the Nigerian fintech space?

32:35 - Nelson asks - Are there any conventional startup advice that did not work for Paystack as their target market is Africa?

34:55 - Nelson asks - What are some important lessons he learnt while building Paystack?

37:20 - Nelson asks - What are some applications he would love to see been built on top of Paystack?

39:30 - Building for Africa

41:50 - Nestor Ezeagu asks - Do you think something like GoFundMe could work in Nigeria?

42:20 - Car Joyy asks - Can I receive payments as an MVP ecommerce site before registering as a company?

43:40 - Achyut Shrestha asks - What’s your tech stack?

44:15 - Jordan Jackson asks - What are the biggest cultural differences that you account for in UX and product design?

48:15 - Shola's outlook

50:10 - What he misses about life before Paystack

52:25 - Paystack in five years

53:50 - Music recommendations

I think many people like kind of know about Paystack, but what can you give us the 1 line explanation?

We help merchants in Africa accept payments from their customers.

So businesses will connect to Paystack and almost immediately the customers can pay them with the credit cards, debit cards, and different payment methods.

We're currently live in Nigeria and we're trying to just go into other markets very quickly.

And so before that you were also a founder, right?

So yeah, grew up in Lagos, grew up in Lagos, Nigeria.

After college, I studied computer science.

After college, I worked with Heineken, the Bayer company.

I left because I thought I was, I just thought I should be, I'm a maker, I should be making things.

taught Dropbox, it was cloud, and cloud in emerging markets was a good concept.

So we said, what if someone builds a Dropbox on premise

You know, they brought that and all that.

And then banks in Nigeria started reaching out to me to help them build software.

So I built software for about 3 banks and quickly I said, you know what, this payments, like I always knew the state of payments wasn't where it should be, but I didn't think it was going to be me.

But just working with the banks, I just figured, you know, if there's someone that can figure out payments, it probably will be me, because I built world-class software before, And now I just have access.

I understand how the financial system works.

Spent about 1 year just doing the underground work.

And I was calling all of them, just talking through what they wanted and building for them.

And then 1 day, 1 of my friends actually sent an email, copied all the YC founders.

It was late because Nigeria is 9 hours, I think it was 9 hours ahead or 8 hours.

I saw that email and said, hey YC, blah, blah, blah, blah, blah, blah.

Just sent that email and copied all, everybody, Sam, Michael, everybody.

And then I woke up in the morning and Michael had responded, Michael Sibyl and said, hey, Shola, tell me more about Paystack.

So I spent about 5 hours trying to compose the best email ever,

Which worked because Michael responded with another 1 line.

I applied for YC fellowship and I didn't get in actually.

So immediately they asked me to apply again for the YC.

We became the first Nigerian company to get into YC.

Now I think there are over 10 other companies that I've gotten in just 2 years, which is really amazing and exciting.

And we launched FaceTac, and it's grown so fast since we launched.

Brian Willsher-Shakey And you guys just raised again.

Menon Yes, yes, we just raised a series A million dollars from Stripe and Visa.

Brian Willsher-Shakey So I think a lot of people are curious, who are probably from Africa, about what your YC application looks like.

was the first thing I released, because people, honestly, when I started my first company, my Akken News profile, I think I opened it in 2008 or 2007.

So I actually applied for YC then too, but I probably, I didn't expect to

But so like, I didn't expect to get into because there was no reference like why would Nigerian company get into YC.

But very quickly I realized that YC structure is actually optimized for just finding the best companies, you know.

On the interview day, I actually remember they asked us how much had we processed that month.

Now last month we did over 20 million dollars.

But I think application was really simple.

And what you're building right now, is it basically identical to what Paystack, what the application for Paystack was?

I think it's still broken, but I think we've made a lot of progress just trying to figure it out.

He had worked on a payments company actually that didn't work out.

And then, you know, So when I wanted to do payments, it was obvious I had to call Ezra back.

So you just built a prototype and pitched him?

And while I was engaging, I told you about the back and forth with Michael.

So 1 of the back and forth, Michael was saying, who else was working with me on the project?

So I talked about Ezra and a few people and we're like, you know, is there someone that really you can take along with you on this journey.

And I think it was a very good decision because yeah, just having 2 people connected with the same vision, just building this, just we started moving faster and things just started getting better.

And so you, when you arrived, so you were in the winter 2016 batch.

When you arrived in January, or I guess you did your interview in November

Every time I talk about the paystack story, I talk about the interview day because we got into YC, we wanted to just see what was happening.

So we came in a day earlier and just came in to see what was happening.

The first company I saw was someone just building a kind of shirt that never gets dirty.

It showed us it had like dirty what I had.

I saw 2 ladies, Isono Health too, I think they got into YC.

They were building a bra that detects breast cancer, you know, like school stuff.

And people were asking us, what are you guys building?

But it was fascinating for people and people were like, wow, this is amazing.

Obviously, there's so many people in Africa.

If there's any team trying to figure out payments there,

I got at least 2 emails the night before interview from people I met saying they thought we were building something cool.

The next morning, just coming into the interview, we were a bit more confident.

Were they saying things like, why won't Stripe build this?

I came on, we got on a very long flight, I think it was about 22 hours just from Lagos to San Francisco.

But I only practiced, it was just the first line.

I just got it like, hey, tell us what are

We've made a huge leap over what currently exists.

So I had to just pull out a laptop, showed them.

I remember also they asked us why we were not live.

We were worried about fraud and all that.

And they said, you know, they don't think we should put an artificial barrier to growth.

Like we grow and if people want it, then open it up.

So I thought Like that might have been a problem, but it didn't matter.

And then we got a call in the evening asking if we wanted YC to invest.

And then so what was it like when you, I mean, I don't know nearly as much as you do about the Nigerian startup scene, but like when you were just thrown in with everyone else in January.

I think a lot of people don't recognize that, but we didn't feel, We didn't feel

Actually I thought I was going to have a problem.

No, we got in, we met people from Ghana working on, I think, she's from Chicago, but like she's originally from Ghana, you know, so there's a lot of diversity in YC.

And so then what are their substantial differences in any element of the startup scene in Nigeria?

I think 1 of the things we just saw quickly was just the, I'll say, I don't want to say the age, but I think in Nigeria, when I was starting up, The kind of people that were building cool stuff were really like in their 30s, in their 40s, in their 50s.

So just coming here and seeing young people just doing amazing stuff,

young people that are doing amazing stuff.

know, I remember Justin Khan, for example, I remember watching Justin TV, you know, and just seeing him about 12 years, or 10 years later, still have voice, he's still looking young.

I'm like, wow, everybody's still young, you know.

So I was really shocked at how much, how young everyone was, how connected everyone was.

I think the other thing is also just the, I like to say, just the quality of the advice, you know, or the, you know, things are not as intuitive as they should be.

Like how they say, that's my favorite like, oh, I see, that's the first thing I picked up, 1 of the first few things I picked up.

Like the startups, founders think they want to be the way to network, like the way to get out there is to network and just be everywhere, you know, but the way to build a strong network is to build something impressive, you know, and just learning That very quickly made me focus heads down, you know, and it was helpful.

Now I feel like I know people I need to know without having to just be everywhere.

I was asking like, you know, the handful of impressive people that I met

just like, don't worry about it, just make cool

Also, I think the long-term view was also very helpful, which helped me.

I think I remember a conversation I had, I think it was Michael too, just asking about what this would look like.

And he said, it takes about 7 years to build a solid startup anyway.

And so that was really refreshing for me to say, you know, I'm not

And I'm looking forward to the next 4 years.

What does the payments market look like in Nigeria?

So I would say Nigeria's GDP is about $500 billion.

But just less than 2% of consumer spending is spent with cards.

And even more, a lot of that is just people using their cards at the ATM to get cash out so they can spend it.

So yeah, so I think it's still very, very early.

Most of them are still happening offline, but online transactions are kicking off.

New business models have been created and it's getting obvious that digital payments will win.

So there's a company called ByPower, I think they're in YC too, they're selling electricity online, the use base that.

Before now, before them, you would have had to go buy electricity like at a store.

But if your electricity goes off at 9pm on a Friday night, then you have to

the fact that you can pay digitally means you can always have electricity.

And then multiple business models like that, making it very easy for people to do things.

So I think, and people are realizing this, smartphone adoption is increasing, mobile penetration is increasing, you know, so I think it's a good time.

Everything's picking up and we're just there just trying to connect the consumers with the budgets and remove all the friction because I think, and just to say why pay stack is extremely interesting.

I think before now, a lot of the payments infrastructure was built for enterprise companies.

And of course, enterprise companies like complexity.

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Helping African Businesses Get Paid, Shola Akinlade of Paystack