Since 2014, Y Combinator, the popular U.S. based accelerator, has invested $120,000 for 7 percent equity in its companies. Paystack, the Lagos-operating fintech company which was acquired by Stripe in a deal north of $200 million, attended YC, post- 2014. If we assume that YC invested $120k for the 7%, we can conclude that Paystack was worth $1.7 million during the deal.
By looking at the multiples and the short time they created this value, Paystack is possibly the most successful Nigerian startup on value creation for investors for deals above $50 million.
With an exit of $200 million – a three digit-multiple- and considering the typical delusion, I estimate that YC will receive at least $12 million for its investment at that very early in Paystack. Yes, the Americans have turned $120k into $12 million in your neighborhood in Lagos. Sure, how you wish!!! Sorry, that is why one smart man wrote “Acres of Diamond”. That glory is everywhere if you seek it earnestly! But give it to the Americans; Paystack revenue was $1,300 when YC accepted it.
More so, YC has invested in about 40 African countries. If we keep the same $120k per startup, the total investments will come down to $4.8 million. For this analysis, I am discounting growth phase investments where YC joins other investors, post-graduation in its program.
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Simply, YC has risked $4.8 million in all the startups, and one startup has returned at least $12 million. Yes, YC has already won in Africa.
Paystack Is The Most Successful Nigerian Tech Startup on Large Value Creation for Investors
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Nothing ventured, nothing gained. It is not a enough to press calculator and extrapolate what could have been gained, ‘if only’ you weren’t blind, as if you can now see.
Tomorrow, pitch a promising idea to any black man or woman here, you will still get the same cold shoulder people got a decade ago, in other words, nothing has changed! Some will even ask for sixty percent equity, before they can invest fifty thousand dollars. Small vision, greedy returns; because poverty has built palatial homes in many minds here.
Everyone should chill, we know nothing about vision or value in this part of the world, so no need pretending as though we have improved an inch since 2014.
The same people continue to win, and they keep getting wealthier, while others keep analysing and praising their ingenuity and bravery.
Common sense is never common joor.
I came across Paystack back then in 2017 when I was looking for a payment platform I could use for my online store. I was trying to build Shopify before they became known in Nigeria, Paystack then was not even on Shopify. I wondered why we didn’t have something like Paypal that can do what it does. We still have that same issue, you can take a good idea with all its potentials in Nigeria to an investor here they would not put money in it. They would instead take your same idea and being to run with it. We put our money in the most useless things in this country. Yet the country begs for ingenuine ideas like this that will create jobs and make our country better. There is still a lot of room in the space where Paystack is. Let someone else do something similar, it is not late. Paysack as good as it is, is still not as seamless as Paypal, they do not have payment buttons and you cannot easily collect payment from outside Nigeria, I hope that this will be what Stripe will enable it do.
thanks for this