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Paystack YCombinator Application

Paystack successful YCombinator application from 2016 winter batch (YC W16).

Modern payments infrastructure for Africa
Paystack is a small and vibrant family working across Lagos and San Francisco. Paystack lets businesses accept payments via credit card, debit card, money transfer and mobile money on their websites or mobile apps.
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If you have a demo, what's the url?

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Describe what your company does in 50 characters or less.

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APIs and tools to enable merchants accept payments in African Markets

What is your company going to make? Please describe your product and what it does or will do.

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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.

Where do you live now, and where would the company be based after YC?

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Lagos Nigeria


Please enter the url of a 1 minute unlisted (not private) YouTube video introducing the founder(s).

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Who writes code, or does other technical work on your product? Was any of it done by a non-founder?

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Android library written by a contractor, but we have contracts already


How far along are you?

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Private Beta. We are piloting with a dozen merchants and we have hundreds of merchants on our waiting list.

How long have each of you been working on this? How much of that has been full-time?

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Since Nov, 2014

How many active users or customers do you have? How many are paying? Who is paying you the most, and how much do they pay you?

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12 Pilot merchants and up to 400 on the waiting list

What is your monthly growth rate?

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We are currently growing our waiting list at 10x, and transaction volume at 15x.

How much revenue?

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If you are applying with the same idea as a previous batch, did anything change? If you applied with a different idea, why did you pivot and what did you learn from the last idea?

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By the last application, it was just a prototype, now we’re already running live transactions and we’ve released additional libraries.


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?

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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. I finished the engagement in Nov. 2014 and immediately created Paystack. 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. I’ve personally spoken to over 150 merchants and everyone is excited and waiting. Our pilot merchants need it so much that they started using it without a settlement system, so they did not mind leaving their money with us for over 6 weeks.

What's new about what you're making? What substitutes do people resort to because it doesn't exist yet (or they don't know about it)?

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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.

Who are your competitors, and who might become competitors? Who do you fear most?

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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. No incremental progress or problem-solving. 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? Local Non FI’s are the real competition, but we believe that as long as we focus on solving the merchant’s needs we will continue to grow our business.

What do you understand about your business that other companies in it just don't get?

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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.

How do or will you make money? How much could you make?

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Transaction fees. 1.9% + 50cents

How will you get users? If your idea is the type that faces a chicken-and-egg problem in the sense that it won't be attractive to users till it has a lot of users (e.g. a marketplace, a dating site, an ad network), how will you overcome that?

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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.


Have you formed ANY legal entity yet?

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Please list all legal entities you have and in what state or country each was formed (e.g. Delaware C Corp, Mexican SAPI, Singapore Pvt Ltd, etc.).

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Trading entity created in Lagos, Nigeria

Please describe the breakdown of the equity ownership in percentages among the founders, employees and any other stockholders. If there are multiple founders, be sure to give the equity ownership of each founder and founder title (e.g. CEO).

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Shola — 80% Employee Pool — 10% Advisory Pool — 10%


What convinced you to apply to Y Combinator? Did someone encourage you to apply? Have you been to any YC events?

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How did you hear about Y Combinator?

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been on hacker news since 2007

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