$4 M seed funding received by Nigerian fintech startup Earnipay to scale earned wage access solution
Earnipay, a Nigerian fintech firm that gives income-earners flexible and on-demand compensation access, has raised $4 million in a seed round to expand its product.
Earnipay, founded by Nonso Onwuzulike last year, connects employer payroll and HRM systems to allow employees to obtain their earned compensation promptly and without interest.
Its approach aids businesses in increasing employee engagement and productivity by alleviating financial stress caused by the need for salary advances or high-interest payday loans. The startup, which had been in development and beta testing since September, formally commenced operations last month and has already serviced over 20 organizations, outsourcing firms, and HR solution providers in Nigeria.
Canaan Ventures led the US $4 million seed round, which also included XYZ Ventures, Village Global, Musha Ventures, Ventures Platform, Voltron Capital, and Paystack CEO Shola Akinlade. Earnipay plans to use the funds to expedite the development of its technological platform in order to better serve large-scale employers. By the end of 2022, it hopes to have 200,000 employees using its on-demand compensation solution.
“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,” Onwuzulike said.
“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.”
Earned income access, according to Canaan partner Brendan Dickinson, is rising fast in many countries and is a “natural match” in Africa.
“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.
