South African Fintech, Stitch, Raises $25M in Series A Extension

Open banking, which allows traditional banks to release their data via APIs for the development of new financial services, has greatly impacted global payments over the last decade. This innovation, which uses APIs to access customers’ financial data and provide integrated financial services, is particularly prevalent in Africa.

Stitch, a South African fintech company, is aiming to become a leader in this payments segment. The firm has developed an end-to-end payments solution designed to cater to the intricate and changing payment needs of enterprise clients.

Stitch’s Funding Round

Stitch has recently raised $25 million in an extension round of funding. The round was led by Ribbit Capital, a globally recognized fintech investor, and pushes Stitch’s total Series A to $46 million. Several existing investors, including CRE Ventures, PayPal Ventures, and the Raba Partnership, participated in the round.

This is Ribbit Capital’s third investment in Africa, following their leading investments in Chipper Cash’s $30 million Series B and Wave’s $200 million Series A.

Growth Stage and Future Plans

Stitch, which was founded in 2021, is entering its growth stage. The firm has been fortunate to have the backing of prominent local and international investors, who believe in the company’s ability to establish and scale products in the emerging fintech category. As the company grows, showing healthy growth numbers becomes increasingly important.

According to Kiaan Pillay, Co-founder and CEO of Stitch, the company’s strong traction and pre-existing ties were critical in securing its lead investor and closing the round. Stitch is expected to process over 50 million transactions, totaling $2 billion in total payment volume this year.

Stitch’s Product Features

Stitch has since evolved into a full payment service provider. It offers a variety of services including bank, debit and credit card payments, recurring debits, cash and manual bank transfers, and disbursements of funds. These services are used in a variety of ways, including e-commerce checkouts, finance operations, financial services, lending and insurance, marketplaces, and recurring payments.

Stitch’s payment solutions are primarily offered to enterprise businesses in South Africa. The company has a handful of startups and small businesses as customers in Nigeria and other African countries where it has licenses to operate.

Stitch has moved from being a single-method platform to a next-generation payment service provider for local and global enterprises. The company’s solution is particularly attractive to global companies looking to enter the market for the first time, thanks to its end-to-end process.

Stitch and the African Market

From the perspective of consumer internet companies in the U.S. or Europe, South Africa is often seen as the gateway to Africa. The country has a functional credit card system, making card integration straightforward. Still, it’s crucial that these companies consider other payment options in the African market, where cards aren’t common, and this is where Stitch can assist.

Stitch’s platform offers customers better reliability, higher uptime, and quicker problem resolution by using direct connections with banks and networks and eliminating intermediaries. The company also provides client support, including localized insights into the payments landscape and custom-built solutions tailored to simplify the process of sending, receiving, and managing funds.