South African fintech company, Stitch, has secured a significant investment of $25 million in an extension round of funding. This round was led by Ribbit Capital, a global fintech investor, with participation from existing backers, including CRE Ventures, PayPal Ventures, and the Raba Partnership. This investment brings Stitch’s total Series A funding to a substantial $46 million.
Stitch is dedicated to providing an “end-to-end payments solution” designed to cater to the complex and evolving payment needs of its enterprise clients. Its services primarily revolve around enabling businesses to create, optimize, and scale financial products while offering API gateways to enhance online payment conversions and streamline payment operations.
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The company has experienced substantial growth since its inception in 2021, with clients ranging from established enterprises to startups and small businesses. Its platform allows clients to access customers’ financial accounts and offer various services such as personal finance, lending, insurance, payments, and wealth management.
Why The Investors Invested
Ribbit Capital’s decision to lead the funding round for Stitch can be attributed to several factors. In the first place, Ribbit Capital has previously invested in successful African fintech startups, such as Chipper Cash and Wave, indicating a positive track record and familiarity with the African fintech landscape. This experience likely gave Ribbit confidence in Stitch’s potential for success.
Again, Stitch’s strong performance and traction in the market played a crucial role in attracting investment. As Stitch continues to process over 50 million transactions totaling $2 billion in total payment volume (TPV) this year, these impressive numbers validate the company’s growth and potential profitability. In the world of venture capital, concrete numbers often hold more weight, and this aligns well with Ribbit Capital’s investment strategy.
Additionally, Ribbit Capital’s understanding of the global fintech landscape and emerging markets is seen as invaluable to Stitch. As the company expands its services, having a knowledgeable investor with a global perspective can help navigate the challenges and opportunities in different markets.
A Look at Stitch
Stitch, founded in 2021, is a Cape Town-based fintech company co-founded by Kiaan Pillay, Natalie Cuthbert, and Priyen Pillay. The primary focus of Stitch is to provide end-to-end payment solutions to enterprise businesses in South Africa, with notable clients including MTN, Multichoice, the Foschini Group (TFG), Standard Bank’s SnapScan, and Yoco.
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While the company primarily serves South African enterprises, it also has licenses to operate in other African countries, with a growing customer base in Nigeria. Stitch’s services have evolved from a quasi-data, quasi-bank-to-bank payments platform to a comprehensive payment service provider. Their platform allows customers to accept payments through various methods, manage and reconcile payments across different providers and geographies in a single dashboard with their PayOS feature, and disburse funds.
One notable aspect of Stitch’s strategy is its adaptability to the specific needs of its clients. The company has successfully provided a modular approach to adding new products and features, making it appealing to large enterprises that demand flexibility in their payment solutions.
As consumer internet companies in the U.S. and Europe look to enter the African market, Stitch plays a vital role by offering a range of payment options tailored to the local context, where credit cards may not be prevalent. This positions Stitch as a gateway to Africa for global enterprises.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard