Nigerian fintech startup Earnipay secures $4m seed round to scale access to earned wages solution
Nigerian fintech start-up Earnipay, which provides flexible and on-demand wage access to employees, has closed a US$4 million funding round to expand its offering.
Founded by Nonso Onwuzulike last year, To earn integrates with employer payroll and human resources systems to enable on-demand financing allowing employees instant access to their earned wages, interest-free.
Its solution helps organizations improve employee engagement and productivity by relieving the financial stress caused by eliminating the need for a payday advance or predatory payday loans with interest rates. The startup officially launched operations last month, having been in development and beta testing since September, and has already served more than 20 businesses, outsourcing companies and HR solution providers in Nigeria.
Its US$4 million seed round is led by Canaan, with participation from XYZ Ventures, Village Global, Musha Ventures, Ventures Platform, Voltron Capital and Paystack CEO Shola Akinlade. Earnipay will use this investment to accelerate the development of its technology platform serving large enterprise employers. It plans to offer its pay-on-demand solution to 200,000 employees by the end of 2022.
“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 debt cycles with unrealistic repayment periods and high interest rates,” Onwuzulike said.
“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 here. demand, and we’re thrilled to be pioneering this incredible solution in Africa. I’m thrilled to be working with a group of highly respected investors who understand the need for a platform like Earnipay to drive better access to wages and, above all, to improve the financial well-being of income earners in Africa.
Canaan partner Brendan Dickinson said access to earned wages is growing rapidly in many markets and is a “natural fit” in Africa.
“Earnipay quickly established itself with a product designed specifically for payroll behaviors in this region, and early adoption by employers is very strong. Nonso has built one of the strongest teams we have encountered on any continent, and we are delighted to have the opportunity to partner with them,” he said.