Paystack recently raised $8 million in a funding round that was led by Stripe with participation from Visa, Tencent as well as Y Combinator. The company then filed their Form D with the Securities and Exchange Commission (SEC).
According to Investopedia, Form D is a short notice, detailing basic information about the company for investors in the new issuance. Such information may include the size and date of the offering, along with names and addresses of a company's executive officers.
This notice is in lieu of more traditional, lengthy reports when filing a non-exempt issuance. The form must be filed no later than 15 days after the first sale of securities. Several companies like M-Kopa and Flutterwave have also previously filed with the SEC.
Below are a few things to know about Paystack from the SEC Form D it filed a few months ago;
1. Incorporation
The company was incorporated in Delaware three years ago in 2015, though headquartered in San Francisco. There's been an increasing number of startups operating in Africa incorporating in Delaware or having the principal place of registration as Delaware.
The company is incorporated in Delaware though headquartered in San Francisco. There's been an increasing number of startups operating in Africa but incorporating in Delaware. Flutterwave and M-Kopa are also Delaware incorporated companies according to the SEC Form Ds.
It is easy to conclude that perhaps either the investors are dictating where the startups are incorporated or the startup founders are doing it early on with the end goal of making it easier for them to raise capital from the US.
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Given that over 80% of disclosed investors in Africa in 2017 were foreigners while 90% of the capital invested in the continent went to startups founded by at least one or more European or North American.
Looking at the trend of incorporation, it is then safe to start using the term startups in Africa, rather than African startups or companies.
2. Type of funding
Though it is not clear how much Paystack gave away, on form D, the startup indicated that they had given away equity to the investors. The deal also had a combination of angel, VC, and other investors. There were 40 investors who participated in the round.
3. Funding raised
Paystack pointed out that they had raised $8 million from their Series A. However, the form D states that the payments startup put USD $10,205,002 for sale and all was bought. When we contacted Paystack, the company pointed out that the total amount raised was $8 million for the Series A.
"To clarify, $8M was raised during the recent Series A funding, which brings the monies raised since the inception of Paystack, including seed funding to $10.2M," wrote the Paystack team.
The same can be realized when you look at Flutterwave's SEC D that it filed last year. The startup stated that it missed its target of $18,319,173 USD and instead raised $15,313,841 USD according to its Form D. But, they announced $10 million.
This perhaps means that they filed for both the $1.3 million Seed round they raised in 2016 with the Series A at once. Additionally, they could have raised that amount in total but went on to give a commission to an agent that put the deal together.