Stitch announces $25 million Series A Extension

We’re super excited to share our latest phase of growth at Stitch. We recently closed a $25 million Series A Extension, led by Ribbit Capital. 

The thing about the team at Stitch is that we move quickly. We launched our first payments product only two years ago. Today, we’re processing over 50 million payments annually, and over $2 billion in value, for some of the largest businesses operating in South Africa, including MTN, Multichoice, The Foschini Group (TFG)’s Bash, HollywoodBets, LottoStar, Luno, Yoco and many more - with a few more exciting clients launching soon.  

Over the last two years, we’ve gone from a single-method (Pay by bank) provider to an end-to-end payments solution provider with eight pay-in methods (and counting), comprehensive payouts capabilities and a robust payments management platform (we call it PayOS), enabling payments orchestration and reconciliation via a single application. PayOS works as well for Stitch methods as it does for other providers and methods.

As we like to say at Stitch: TCPC (things change; people change). To reflect our growth and development, we launched a rebrand alongside this funding round to demonstrate our growth from an early-stage startup working with other startups to a growth-stage business that’s trusted today by global and local large enterprises as their primary payments provider…But we’re still purple.

A few lessons along the way

We learned quickly that we can’t be everything to everyone. We believe that your early clients shape the product and company you become, and as such, we’ve had to be incredibly selective about who we work with. About 18 months ago, we made a bet that if we could start by enabling better, more efficient money movement for large enterprises with the most complex needs and processes, we could later adapt that and make it work more easily for smaller businesses. This early shift to focus on enterprise clients required us to make changes to how we build, how we go to market with new solutions and how we support our clients.

Over the last six months, we tested this theory and built a simplified, no-code version of our product that’s designed specifically for SMEs without access to developer teams or even a website. Last month, we officially launched this solution as a spin-out brand: WigWag. We’re excited about the early uptake WigWag’s had, and what it means for small businesses and sellers who wouldn’t otherwise have access to simple digital payments.

Amongst all of this change, we have remained a client-first organization. And we mean that. When our clients raise a new payment challenge or come to us with capabilities they’d like to see in their Stitch integration, we get to work to make it happen. It’s actually incredibly rare that any onboarding, use case or client journey is the same at Stitch. While intuitively that might seem undesirable - it’s what we want. We want to meet our clients where they are, in whatever shape or form that takes. From our customer success team that walks with our clients through every step of their journey with Stitch, to our client solutions team that co-builds custom integrations for them, to our engineering and product teams that will prioritise what our clients want to see - the voice of the client is felt across the Stitch organisation. 

Looking ahead

Our goal is to build client-friendly infrastructure and tools that simplify and optimise the task of creating delightful financial experiences. To do this, we need a deep understanding of our clients and the trends impacting their businesses.

These are some of the trends we’re seeing play out today:

• Multi-method payments. Card-dominant offerings are no longer sufficient. With increasing uptake of various wallets and a growing share of bank payment methods (such as Capitec Pay in South Africa), merchants require providers who can offer multiple methods with equal features across them. Too often, non-card methods are added as an afterthought.
• Multi-provider environments. Often, multiple methods across multiple geographies means a merchant needs to have multiple providers - both in each market and across markets. This means providers need to flexibly fit into complex payment environments and integrate directly with merchants or through existing providers or platforms with ease.
• Embedded payments as a feature of other platforms. Increasingly, payments are being embedded into a client’s core operating systems - e.g., their commerce platform. For large enterprises, these platforms are highly customised, and they require much more than off-the-shelf plug-ins. The ability to deploy sales engineers and solutions architects to design the right solution that fits with a client’s chosen platform is a critical piece that’s necessary to achieve the payments performance levels they need.
• Complex payment flows. Business models are evolving, and as a result, more platform and marketplace models are becoming prevalent in large enterprises. This means providers need to be able to accommodate pay-ins and payouts, manage settlements, orchestrate split payments and be flexible enough to customise these solutions for any combination clients can think of.
• Unified commerce. Especially for large enterprises, omnichannel matters. This means digital and physical channels are merging, and orders and payments need to move fluidly across both environments. The ability for online payments providers to interface with offline point-of-sale systems is becoming a key factor in the purchase decision.

What’s next for Stitch

To anticipate and solve these problems for our clients, we have spent the last year building out, refining and testing our orchestration and reconciliation offerings at scale. With PayOS, we are helping clients transform their payments and streamline finance operations, giving teams one place where they can view and orchestrate all transactions - while gathering data on which are performing best for their business. Over the coming months, our goal is to utilise PayOS to look at ways we can grow with and alongside our clients - laterally to cover more of their payments needs and geographically to serve them in more markets.

Some of the reasons our investors and our clients are excited about Stitch:

We know payments, inside and out

It’s vital that our entire team continues to learn more and evolve our solutions every day. That’s one of the things that makes our team incredibly unique and highly effective. We’re hungry to learn, to improve our products and to tackle new, big, audacious problems. In fact, we launched a publication this year that serves to feed our own curiosity and learning about money movement challenges and payments systems around the world.

We partner with your business, for your needs

We can’t stress enough that even though we build infrastructure, we believe approaching complex enterprise payment needs with a cookie cutter is a recipe for disaster. We aim to holistically understand each of our clients’ needs today - from specific pain points and use cases, to industry trends, to their longer-term vision for the next 1-10 years. We work to understand each vertical we support deeply - from crypto and financial services, to e-commerce and many more - and actively work to act as thought leaders that can help our clients improve their overall performance.

There is an enormous amount of opportunity in South Africa

While we’re looking forward to expanding into new markets, we’re also doubling down on our commitment to South Africa. We believe this is one of the most dynamic and unique markets in the world, and we’ve only just scratched the surface in terms of its potential. South Africa has:

• a highly banked population, especially when compared with other emerging economies
• a burgeoning open banking ecosystem 
• a significant population size with a high level of internet and mobile penetration
• a significant number of established enterprise businesses 
• a welcome environment for international players looking for a launchpad on the continent (see our Launching a Business in South Africa guide)

Having the right support makes all the difference

We’re incredibly fortunate to be backed by the absolute best investors and partners for fintechs in the world. Truly. Our investors have either started or backed the most prolific and successful fintech businesses - and we are benefitting from the lessons they’ve learned along the way. We’re excited to add our latest investors to this roster and look forward to achieving more growth, together. 

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