Earnipay, a financial technology solution that provides flexible and on-demand salary access to income-earners, announced Friday it closed a seed round of $4 million to scale its operation in Africa.
This was disclosed by Maria Adediran, Earnipay’s account director, in a statement to PREMIUM TIMES.
Founded by Nonso Onwuzulike in 2021, Earnipay officially launched operations last month. The company says it wants to improve employees’ financial well-being by partnering with employers and seamlessly integrating with their payroll systems to offer its services to employees, who can then track and withdraw their accrued salaries via the app on any day of the month.
“At the end of the month, the employer deducts from the employee’s salary the amount withdrawn, refunds Earnipay with it, then pays the employee the balance as their salary for that month,” the firm said.
“Earnipay charges employees a small processing fee of NGN250 or NGN500 for this access. There is no payback and no interest charge because employees are accessing what they have worked for, it’s their money,” the statement said.
The funding round was led by Canaan, with participation from XYZ Ventures, Village Global, Musha Ventures, Ventures Platform, Voltron Capital and Paystack.
According to the company, with the seed funding, Earnipay will accelerate the development of its technology platform to serve large enterprise employers. By 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 on-demand salary solution to 200,000 employees by the end of 2022.
The document further stated that Earnipay has already served over 20 businesses, outsourcing firms and HR solution providers in Nigeria.
Speaking on the funding round, the CEO Nonso Onwuzulike, said “Financial worries are the leading cause of distractions in the workplace. The monthly pay cycle means employees are often unable to afford daily expenses, cover emergencies or take advantage of immediate financial opportunities.
“As a result, they become exposed to predatory payday loans and get stuck in unending debt cycles with unrealistic payback periods and expensive interest rates.
“Earnipay exists to address this problem and offer an ethical alternative to instant salary access while helping employers improve employee engagement and retention at zero cost to their business.
“The future of salary is on-demand, and we’re excited to be pioneering this amazing solution in Africa. I’m delighted to be collaborating with a group of highly respected investors who understand the need for a platform such as Earnipay to drive better access to salaries, and, importantly, to improve the financial well-being of income-earners in Africa,” Mr Onwuzulike said.
“We are systematically addressing the inefficiencies in how the African workforce interacts with salaries and will continue to build products and services with both employers and employees in mind,” he noted.
“We’ve seen earned wage access grow rapidly in many markets and believe it’s a natural fit in Africa,” Brendan Dickinson, the partner at Canaan said.
“Earnipay has quickly established itself with a product built specifically for the payroll behaviours of this region, and early employer uptake is very strong. Nonso has built one of the strongest teams that we’ve met on the entire continent, and we’re thrilled for the opportunity to partner with them,” he said.
Employers can sign up to Earnipay via the web platform to gain access to the employer dashboard and add their employees in a simple process, it said.