Earnipay, a financial technology solution that provides flexible, on-demand access to employees, has closed a $4 million funding round led by Canaan and with participation from XYZ Ventures, Village Global, Musha Ventures, Ventures Platform, Voltron Capital, and CEO of Paystack Shola Akinlade. Targeting employees across Africa, Earnipay officially launched operations in January 2022, having been in development and beta testing since September 2021.
Founded by Nonso Onwuzulike To improve the financial well-being of employees, Earnipay uses its technology to provide employees with the ability to access their earned wages in their accounts flexibly, in real time, and without interest. Earnipay partners with employers and seamlessly integrates with their payroll systems to offer its services to employees, who can then track and withdraw their accrued wages through the app. Companies can exercise comprehensive oversight and set limits on the percentage of salary employees can withdraw each month. Since running in beta, Earnipay has served over 20 companies, outsourcing companies and HR solution providers in Nigeria, including Eden Life and Thrive Agric, whose employees have used the app to access their pay more of 1,000 times, indicating high demand for the solution.
With the seed funding, Earnipay will accelerate the development of its technology platform to serve large enterprise employers. In 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 pay-on-demand solution to 200,000 employees by the end of 2022.
Speaking on the funding round and recent launch of Earnipay, CEO Nonso Onwuzulikesaid, “Financial worries are the number one cause of distractions at work. 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 cycles of debt with unrealistic repayment periods and high interest rates. 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 on-demand, and we’re excited to be pioneering this incredible solution in Africa. I am delighted to collaborate with a group of highly respected investors who understand the need for a platform such as Earnipay to improve access to wages and, above all, to improve the financial well-being of employees in Africa..”
“We have seen access to earned wages growing rapidly in many markets and believe it is a natural fit in Africa,” noted Brendan Dickinson, partner at Canaan. “Earnipay quickly established itself with a product specifically designed for payroll behaviors in this region, and early adoption by employers is very strong. Nonso have built one of the strongest teams we have come across across the continent, and we are delighted to have the opportunity to partner with them..”
Access to on-demand pay is a huge opportunity in Africa, with over 70% of the African workforce (500 million people) being paid every 30 days and living on paycheck to paycheck. The 30-day pay cycle has led 40% of the workforce to live in an endless cycle of debt as they struggle to match their income to their daily expenses, emergencies and opportunities. African companies are struggling to provide scalable solutions for employees to access their daily salary while they work there due to legacy payroll process, lack of cash on hand and remaining internal salary advance a tedious and manual affair.
Earnipay charges employees a nominal processing fee of NGN 250 or NGN 500 for this access. There are no refunds or interest charges because employees have access to what they worked for, it’s their money. With Earnipay, employers offer more financial support to their employees, enabling them to attract and retain top talent in an increasingly competitive job market. In addition to on-demand pay, Earnipay provides financial education to employees to improve their financial literacy with the goal of empowering them to make better financial decisions.
Onwuzulike concludes: “For five months, we’ve been working with employers to deliver a benefit that solves the biggest source of stress and distraction in the workplace: employee money issues. By doing so, employers improve employee engagement and productivity, while positioning themselves as a better place to work. We are systematically addressing inefficiencies in the way Africa’s workforce interacts with wages and will continue to create products and services with both employers and employees in mind..”
Employers can sign up for Earnipay through the web platform to access the employer dashboard and add their employees in a simple process. Employees will receive an invitation and have immediate access to all the financial tools available on the employee’s mobile [via Playstore or App store] or the web application.