Stitch to Boost Enterprise Payment Product with $25M Series A Extension

South Africa's leading fintech company, Stitch, recently announced it has raised $25 million in an extension round of fundraising led by global fintech investor Ribbit Capital. This has brought Stitch’s total Series A to $46 million.  

The firm also has partnerships with big tech firms like CRE Ventures, PayPal Ventures, and Raba Partnership, which participated in the funding round.

Stitch focuses on enabling businesses to build, optimize, and scale financial products and providing API gateways to improve the conversion rate for online payments and optimize the payment operations of its clients.

The CEO and co-founder of Ribbit Capital, Kiaan Pilay, stated that this is the firm's third investment in Africa after participating in Chipper Cash’s $30 million Series B and Wave’s $200 million Series A. Pilay also attributed his firm strength to local and international support since it came public in 2021.

Pillay said,

• It was a good happenstance that we finally started to find traction in a world where hard numbers are significant for investors like Ribbit, whose team we’ve known for a while.

Stitch stated that its end-to-end payment solution is specifically designed for South African businesses such as MultiChoice, MTN, the Foschini Group (TFG), Yoco, Standard Bank’s SnapScan, and many others. Pillay also acknowledges that the company has some startups and small businesses as customers in some African countries where it has a license to operate. 

Natalie Cuthbert and Priyen Pillay's Statement

• 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.

• I don’t think large enterprises only use us for a single method. I think one of the coolest metrics for us is within the first three months of going live with a large enterprise, we’ve seen almost every single one adopt a second or a third product because we can incrementally add things in a very modular way.

• We’re sort of playing in a space that we wouldn’t have expected to, but because big merchants have demanded we have more products, it’s been an easier place to get into and scale from there.

• Everything we do is client-focused. We’ll continue to optimize for what they have. And then scale geographically with them and deeper into the products they already have.

• We also want to continue adding as many first-party payment methods as possible. Our value proposition has been precision engineering and deep infrastructure, so, for instance, we are looking at connecting to card and bank rails without intermediating. Things like this are often slow and capital intensive; that’s why we raised.

The fintech has now raised $52 million in venture capital (including a $6 million seed). The company, which has over 80 employees, plans to use its Series A money to continue developing its platform, expanding its customer base, and seizing opportunities to serve new markets, Pillay expressed on the call, according to the TechCrunch report.