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.
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.