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$2 M seed funding received by SA HR startup SmartWage

SmartWage, an HR and communications technology firm based in South Africa, has secured $2 million in an oversubscribed early fundraising round to help it realise its mission of changing Africa’s workforce through digital inclusion, particularly for frontline workers. SmartWage, which was founded in 2019, began by allowing businesses to provide their employees fast access to a percentage of their earnings and pay for work they have already completed.

It has now grown beyond that, providing businesses with a simple yet efficient approach to digitise their most time-consuming HR operations, allowing them to focus on people while saving time and money. Employees who do not have access to email can use WhatsApp to get company-wide communication, view pay stubs, request leave, and access financial wellness solutions.

Its seed investment comes from investors such as LoftyInc Capital Management, Creator Collective Capital, and Penrose Capital, as well as angel investors from Naspers, Dimension Data, Investec, and Standard Bank, and it was last funded in 2020. SmartWage intends to use the funds to grow its product and technology team, as well as double down on solving employers’ most pressing issues.

According to co-founder Simon Ellis, there is a communication gap between employers and employees, with frontline workers not feeling like they are a part of the company’s brand and promise.

“Payslips and leave are still done manually with paper printouts, while employee communication is done using notice boards or apps, which have huge usage drop-offs. Onboarding and disciplinary procedures are still paper-based, costing businesses precious time, money and resources,” he said.

SmartWage addresses these issues by reducing labour costs for companies, and the company has also built a suite of financial wellness tools, including free financial education and on-demand compensation.

“We have learnt through our process that employees need access to cash more than ever before. Eighty per cent of South Africans struggle to make it to the end of the month without relying on some form of short term debt, and the payday loan industry is booming,” said Ellis.

“If we can save employers time and money through digitisation, we can bridge the gap between South African enterprises and their frontline employees, helping enterprises connect clearly and dynamically with their employees, whilst offering financial wellness tools at the same time. By offering tools that benefit both employers and employees, we have a powerful value proposition.”

Idris Bello, a founding partner of LoftyInc Capital Management, expressed his enthusiasm for the SmartWage product set’s scalability and potential effect in Africa and beyond.

“The team at SmartWage are innovators – they’re building more than just an earned wage access product, and have recognised that in order to make a tangible impact on employers, they need to build a powerful way for employers to engage with their workforce. We are excited to partner with Simon, Caroline and the powerful team they’ve assembled to support SmartWage’s mission to drive digital inclusion across Africa,” he said.

Companies that use frontline staff, such as retail, quick-service restaurants (QSR), manufacturing, construction, and hospitality, are among SmartWage’s clients. Its monthly active user base has increased 14 times in the last year, and it currently works with companies including Edgars, KFC, Debonairs, Seattle Coffee, Truda, and Twizza.

 

 

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