Workpay, the cloud-based HR, payroll and benefits platform for organisations with employees across Africa, today has announced that it has raised $5m in a Series A funding round led by Norrsken22.
The round saw participation from Visa, Y Combinator, Saviu Ventures, Axian, Plug n Play, Verod-Kepple Africa Ventures and Acadian Ventures, a venture firm which specialises in investment into the next generation of work technologies. This follows Workpay’s successful pre-series A round of $2.7m in early 2023.
Businesses across Africa grapple with a dynamic employment landscape, navigating diverse regulations, dispersed employees, and hybrid workplaces. Payroll is time-consuming for Small and Medium Businesses (SMBs), with 80% of SMBs still handling payroll manually on Excel and Google Sheets.
According to an official statement, Workpay will use the money raised to aid its expansion across the continent and build out its financial services provision.
This process is prone to errors and leads to lost money, weak compliance and potential penalties. Many lack the resources to implement or support complex systems. On-premises third-party payroll solutions offer limited capabilities, while enterprise-focused software can be costly and cumbersome.
Globally, SaaS solutions have been successful at simplifying the process for Western businesses, but struggle to serve African businesses due to the need for localisation across the 54 countries and price sensitivity on the continent.
Co-founded by Paul Kimani and Jackson Kibigo, Workpay offers a comprehensive cloud-based payroll and HR SaaS platform that manages the entire journey of employees and contractors, from onboarding to offboarding. It includes features like payroll processing, time tracking, leave management, expense tracking, performance management, employee benefits administration and Employer of record (EOR) services among others.
It already has a great foundation with 1000+ businesses across 20+ countries on the African continent on the platform and is looking to provide the future of employee financial services and benefits.
Africa is poised to have the largest working-age population by 2050 and the rise in remote work and talent shortages in other markets is driving demand for services outsourcing in Africa, which will lead to increased demand for African talent.
Workpay is strategically positioned to help companies on and off the continent pay their employees compliantly while providing much-needed financial services to employees.
Speaking on the raise, Paul Kimani, CEO of Workpay said:
“Our goal is to become the go-to solution for employers and employees in managing HR, payroll, and work-related benefits. Our deep understanding of regulation across the African continent allows businesses working across multiple countries to manage payroll and tax using a single integrated platform. This raise will support Workpay to reach profitability, a huge milestone for our company.”
Read also: African startup funding finally crosses $1 billion in 2024, 2 months later than 2023
Meet Workpay’s investors
Norrsken22 is a tech growth equity fund partnering with ambitious entrepreneurs to scale disruptive businesses across Africa. The firm was founded on the belief that scalable entrepreneurship drives long-term and sustainable economic growth.
It is backed by 33 unicorn founders, contributing entrepreneurial skills and funding, and supported by an advisory council of business leaders from across the continent.
Also speaking Ngetha Waithaka, General Partner at Norrsken22 said:
“Our investment in Workpay offers an exciting opportunity to revolutionise how Africa’s SMEs carry out their employee management. Africa boasts one of the largest working-age populations in the world and they remain grossly underserved by existing HR and payroll tools. With the addition of integrated financial services, Workpay’s potential for growth is immense.”
Acadian Ventures is an early-stage venture capital firm that invests in founders who are leading the work revolution and reimagining how people work in the future.
The firm was founded in 2019 and led by Jason Corsello and Thomas Otter, both seasoned operators who have scaled publicly traded global businesses into market leaders. Acadian Ventures invests globally across North America, Latin America, Europe, and Asia.
Thomas said that the team is excited to expand our investment in Workpay. “The company has developed the most comprehensive, modern HR and payroll platform and is poised to become the market-leading HR platform across Africa over the next decade”, he explained.
Verod-Kepple Africa Ventures is tackling the growing gap of funding available, particularly from locally based investors, for companies moving to Series A and B stages in Africa.
Ryosuke Yamawaki, Partner at Verod-Kepple Africa Ventures noted that his team is excited to be part of the journey to revolutionise how human resource management is supposed to be done in Africa. “We have witnessed the leadership team’s exceptional business capabilities to evolve a product that cuts across all HR needs of African businesses”, he concluded.
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