By Adedapo Adesanya
Earnipay, a fintech solution that provides flexible, on-demand access to employees, has closed a $4 million funding round led by Canaan.
The round also saw participation from XYZ Ventures, Village Global, Musha Ventures, Ventures Platform, Voltron Capital and Paystack CEO Mr. Shola Akinlade.
Targeting employees across Africa, Earnipay officially launched operations in January 2022, having been in development and beta testing since September 2021.
Access to on-demand pay is a huge opportunity in Africa, with over 70% of the African workforce (500 million people) being paid every 30 days and living on paycheck to paycheck.
The 30-day pay cycle has led 40% of the workforce to live in an endless cycle of debt as they struggle to match their income to their daily expenses, emergencies and opportunities.
Looking at this, the company understands that African companies are struggling to provide scalable solutions for employees to access their daily salary while working for them due to legacy payroll process, lack of available cash and advance on internal salary which remains a tedious and manual affair.
This informed the founding of Earnipay by Mr. Nonso Onwuzulike, its Managing Director. The startup will help improve the financial well-being of employees. It uses its technology to provide employees with the ability to access their earned salaries in their accounts flexibly, in real time and without interest.
Earnipay partners with employers and seamlessly integrates with their payroll systems to offer its services to employees, who can then track and withdraw their accrued wages through the app. Businesses can have full oversight and set limits for the percentage of salary employees can take out each month.
Since running in beta, Earnipay has served over 20 companies, outsourcing companies and HR solution providers in Nigeria, including Eden Life and Thrive Agric, whose employees have used the app to access their pay more of 1,000 times, indicating high demand for the solution.
With seed funding, Earnipay will accelerate the development of its technology platform to serve large enterprise employers. In doing so, Earnipay will provide employees with the tools they need to make better financial decisions and improve their quality of life.
The company plans to offer its pay-on-demand solution to 200,000 employees by the end of 2022.
Speaking about the funding cycle and the recent launch of Earnipay, Mr. Onwuzulike said, “Financial worries are the number one cause of workplace distractions. The monthly pay cycle means employees are often unable to pay day-to-day expenses, cover emergencies, or take advantage of immediate financial opportunities.
“As a result, they are exposed to predatory payday loans and get stuck in endless cycles of debt with unrealistic repayment periods and high interest rates.
“Earnipay exists to solve this problem and provide an ethical alternative to instant access to pay while helping employers improve employee engagement and retention at zero cost to their business.
“The future of pay is on-demand, and we are thrilled to be pioneering this incredible solution in Africa.
“I am delighted to partner with a group of highly respected investors who understand the need for a platform such as Earnipay to improve access to wages and, above all, to improve the financial well-being of people who earn an income. in Africa. ”