Stitch raises $55 million series B to total $107 million funding in 4 years

South African fintech Stitch had announced a $55 million series B funding round led by QED investors, bringing its total funding over four years to $107 million. The fund will be directed at expanding the company’s in-person payment solutions and enhancing its online payments suite.

The round, which was led by global investment firms QED Investors, Glynn Capital, Flourish Ventures, and Norrsken22, also witnessed participation from existing funders Ribbit Capital, PayPal Ventures,

The Raba Partnership and Firstminute Capital. Stitch’s enterprise business customers include Takealot, Mr. D, MTN, Vodacom, Standard Bank’s Shyft, TFG’s Bash, Hollywoodbets, Luno, and The Courier Guy.

Reacting to the development, QED investors’ Head of Africa and the Middle East, Gbenga Ajayi, said it is thrilled to partner with such visionary founders with assurance that Stitch will continue to set new standards in the payments industry across Africa and beyond.

“Having closely followed the Stitch team over the past four years, it’s been impressive to watch their rapid growth and execution in becoming a trusted payment provider. Their ongoing expansion from a PSP to a comprehensive payments partner, including robust in-person payments and acquiring solutions, demonstrates their unique ability to anticipate market needs and execute at scale,” he added.

In January, Stitch launched Express, a simple checkout solution designed for online businesses of all sizes that leverage e-commerce platforms such as Shopify and Woo. Its payments solution includes a full suite of products such as card, pay by bank, Apple Pay, Google Pay, Samsung Pay, Capitec Pay, Absa Pay, Nedbank Direct EFT, manual EFT, cash, DebiCheck, 24/7, 365 payouts and in-person payments.

With the latest funding round, the South African fintech is now focusing on expanding its recently launched in-person payments solution following the acquisition of ExiPay, a payment solution provider. The acquisition resulted in the rebranding of Exipay’s platform as “Stitch In-Person Payments,” structured for large enterprises managing in-person transactions.

“We’re super excited and proud to be where we are in the market today. We feel we’ve earned the right to work with clients across the board – not just for online or in-person payments, but with any money movement needs. It felt like the right time to more aggressively expand our offering so we can further serve our clients. The upcoming move into acquiring means that we will be able to offer our clients an end-to-end card product with full control over the whole product lifecycle,” the team said in a statement.

Also Read: SA fintech startup, Stitch raises $2m seed, names Benjamin Dada as Nigeria country manager.

Co-founded by Kiaan Pillay (Co-founder of Nigerian ride-hailing app GoMyWay), Natalie Cuthbert, and Priyen Pillay in 2020, the Cape Town-based enterprise payments infrastructure specialist possesses a South African and pan-African focus as it aims to provide full Application Programming Interface (API) access to financial accounts across Africa.

Within six months of its soft launch in South Africa, the company saw more than 50 per cent month-on-month growth in customer and payment volume across all solutions.

Stitch offers a unified payment platform that enables businesses to manage transactions seamlessly across multiple financial institutions.

Simplifying the integration process allows companies to offer diverse payment options, thereby improving customer experience and operational efficiency.

Stitch’s API Product

The company’s API allows developers to connect apps to financial accounts, allowing users to share their transaction history and balances, confirm their identities, and initiate payments. 

The payment platform holds a data and identity API product and a new payment product where it charges developers and companies per API call, like most API fintech startups.

In addition, it charges a fixed fee for some products, such as budgeting or personal finance management apps.

Stitch’s entry into the Nigerian market in 2021 saw the introduction of its payment product instead of its primary data product.

According to the company, it had a more compelling use case for the payments product in Nigeria after speaking to over 40 fintechs, including Chipper Cash, Paystack, Franc, Sanlam, Yoco, and Flexclub. In its branding strategy, Stitch offered Nigerian businesses that intend to use Stitch free access to the product until the end of that year.

In its funding record books, Stitch has demonstrated a strong track record in securing investments to fuel its activities. In February 2021, the company raised $4 million in seed funding, followed by a $2 million seed extension in October 2021 to support its expansion into Nigeria. 

In February 2022, Stitch announced a $21 million Series A funding round led by The Spruce House Partnership, with participation from PayPal Ventures and other notable investors. The company secured a $25 million Series A extension led by Ribbit Capital a year later, bringing its total Series A funding to $46 million.

In the future, the company projects developing its product offering and extending its reach into the African payments industry. Stitch’s development further makes a bold statement on fintech innovation to address market gaps and improve payment systems across Africa.