Stitch, a South African payments infrastructure startup, has raised $55 million in a Series B funding round, bringing its total funding to $107 million within just four years of operation. The funding is aimed at expanding its in-person payment offerings, improving its online payment suite, and facilitating its entry into card acquiring.

The $55 million funding round was led by QED Investors, with participation from Norrsken22, Flourish Ventures, and Glynn Capital, as well as angels including comedian Trevor Noah. Existing backers like Ribbit Capital, PayPal Ventures, Firstminute Capital, and The Raba Partnership also contributed.

According to a company representative, the funding round is focused on Stitch's next phase of growth, which includes expanding its in-person payments launched with the acquisition of ExiPay earlier this year, and bolstering its online payments suite to better serve enterprise merchants across all payments needs. The funds will also support Stitch's expansion into accepting card payments from customers, whether in-store or online.

By becoming a direct acquirer, Stitch will be able to process card transactions directly, without relying on banks, and offer its clients an end-to-end card product with full control over the whole product lifecycle while reducing the number of intermediaries and lowering costs. The company representative noted that this will enable Stitch to provide its clients with an uninterrupted service, which is critical for businesses that operate 24/7/365, such as Takealot.

The funding will also help Stitch invest in infrastructure that enables the flow of money, including payment processing networks, as well as infrastructure to improve payment processing, methods, and service levels. The company representative emphasized the importance of seamless switching between these sources, automatically detecting failures and switching to backups, ensuring uninterrupted service.

Stitch's ability to attract such substantial capital in a challenging macroeconomic climate is attributed to building a business with demonstrable fundamentals. The company has demonstrated a sound business model that addresses a real market need, showing evidence of market share growth, strong client adoption, and positive feedback. Factors such as increasing e-commerce penetration, the rise of digital wallets, and the popularity of buy-now-pay-later (BNPL) solutions have also fueled Stitch's growth.

South Africa's e-commerce penetration is experiencing significant growth, with estimates suggesting a rise from 49% in 2023 to 60% by 2028. This growth has created a demand for comprehensive payment solutions that cater to diverse customer segments, and Stitch is well-positioned to meet this demand. The company serves some of the leading enterprise businesses in South Africa, including Takealot, Mr. D, MTN, Vodacom, Standard Bank's Shyft, TFG's Bash, Hollywoodbets, Luno, The Courier Guy, and many more.

Stitch's payment solutions are designed to provide a seamless omnichannel experience, merging online and in-person payments. The company's Express product, launched in early 2025, is a simple checkout solution designed for online businesses of all sizes that use e-commerce platforms such as Shopify and Woo. Additionally, Stitch's Shield product uses AI to detect fraud across all transactions, providing merchants with tools to manage fraud incidents and handling both prevention and response.

The funding will help Stitch continue to innovate and expand its payment infrastructure, meeting the growing demands of merchants and customers in South Africa. As the payment infrastructure market continues to evolve, Stitch is well-positioned to remain at the forefront, providing comprehensive solutions that cater to the diverse needs of its clients.