- Stitch fintech, a South African payment service, has secured $25 million in Series A extension funding led by Ribbit Capital, reaffirming the continent’s position at the forefront of the global digital revolution.
- Africa’s digital transformation has led to the adoption of digital money, which has redefined how economies earn and led to a surge in emerging industries, including finance-tech startups.
- Africa has been adopting digital money since 2002, leading to widespread adoption of innovative payment services..
In the midst of Africa’s ongoing digital transformation, several sectors have spearheaded and dominated this paradigm shift. Among the standout features of this transformation since 2002 has been the widespread adoption of digital money across the continent.
From M-PESA to Luno and Flutterwave, the emergence of innovative payment services has significantly reshaped the trajectory of progress across Africa.
In a recent milestone, Stitch fintech, a South Africa-based payment service, has successfully secured $25 million in Series A extension funding, with Ribbit Capital leading the investment.
This latest achievement reaffirms South Africa’s status as a beacon of progress among its regional counterparts. It is only a matter of time before the other major players in Africa’s “big four” economies follow suit, further solidifying the continent’s position at the forefront of the global digital revolution.
Fintech Stitch paves the way for digital payments
Africa’s digital transformation consists of adopting and implementing several emerging technologies into everyday life. Several governments and organizations have worked together to realize this dream. They have drafted policies for internet connectivity or overhauling ICT institutes. Amid this significant era for the continent, digital money has redefined how economies earn, opening doors to broader markets.
Through the high rate of digital money adoption, the continent has experienced a substantial surge in emerging industries. One includes Africa’s fintech industries, significantly aiding in increasing the continent’s financial inclusion. Its lucrative market has inspired many to launch fintech startups all over the region. Stitch fintech, a South African payment platform, is among many trying to evolve their region through digital money.
Their drive and plethora of fast and secure payment services soon caught the eye of Ripple Capital, an avid investor corporate. In a recent development, the South African payment platform closed a $25 million Series A Extension led by Ribbit Capital. The round was among the most successful ventures the continent has witnessed in the past decade. Corporate titans like PayPal Holdings, Raba Partnership, and CRE Ventures played a significant role in the extension round.
Kiaan Pillay, Natalie Cuthbert, and Priyen Pillay founded Stitch Fintech in 2019, during the silver age of digital money. At the time, blockchain technology had stretched its capabilities beyond its initial application, cryptocurrency. Its redefining nature inspired thousands of developers to finally realize the flaws of traditional financial systems. This drive inspired these three to seek better payment solutions for South Africa. This led to the creation of Stitch Fintech and its numerous API services.
As per its recent achievements, the South African payment platform seeks to strengthen its commitment to advancing its all-increasing end-to-end payment solution. In addition, the finding will aid in their attempts to expand their services to international waters while still doubling down its reach in South Africa.
Kiaan Pillay, CEO of Stitch Fintech, said, “We moved away from being a single-method platform to a next-generation PSP for local and global enterprises. Initially, we just had a pay-in feature where we supported bank and card payments. While we’ve added more, we now have an orchestration layer, which many enterprises use to manage payment methods and reconcile across different banks. And we do payouts, whether a disbursement, a refund, or a withdrawal. Our solution is attractive for global companies trying to enter the market for the first time because of the end-to-end process.“
The Journey to evolution begins with a single step
Stitch Fintech is among the few African startups that have successfully contributed to the continent’s digital transformation. Their main goal is to increase digital money adoption, overhauling financial inclusion to its unbanked citizens. The South African payment services experienced its first win in February 2021, when it raised $4 million in seed funding.
At the time, Stitch fintech achieved the largest round raised by any API fintech startup in Africa. With its API, developers could connect applications to financial accounts, allowing them to share their transaction history and balances. In addition, it played a crucial security role, as they could easily confirm their identities and initiate payments.
This feat would later finance their first payment product, LinkPay. According to the South African payment platform, Link Pay was the first payment solution that tokenized financial accounts. This feature would enable users to access variable recurring payment services. In addition, it allowed the user to link their preferred financial accounts via Stitch and enjoy payment experiences similar to using a card.
Operation in Nigeria
This new application would cause many investors to lock in their doorstep, resulting in a $2 million seed extension in October of the same year. Investors like Raba, Firstminute Capital, CRE, Village Global, 500 Fintech, Future Africa, and Norrsken backed this funding. The amount expanded its operation in Nigeria, Africa’s leading country in digital money adoption.
Stitch Fintech’s rapid growth and contribution to Africa’s digital transformation would later catch the attention of The Spruce House Partnership, a long-term investment firm. This would eventually lead to a $21 million Series A funding. This amount would significantly aid in its expansion plan but also cushion it amid the crypto crash in 2022.
“These feats are a testament to the dedication of Stitch fintech and its contribution to overhauling digital money adoption. This recent seed funding will aid in its efforts to improve the continent’s financial inclusion.”