Earnipay secures $4 million in seeds to provide on-demand wage access to African employees
Earnipay, a fintech solution that provides flexible, on-demand salary access to employees, has closed a $4 million funding round. The round was led by Canaan, with participation from XYZ Ventures, Village Global, Musha Ventures, Ventures Platform, Voltron Capital and Paystack CEO Shola Akinlade.
Founded by company CEO Nonso Onwuzulike, Earnipay aims to improve the financial well-being of employees by partnering with employers to seamlessly integrate their payroll systems with fintech technology. This way, employees can track and withdraw their accrued salaries through the app any day of the month. At the end of the month, the employer deducts the withdrawn amount from the employee’s salary, reimburses Earnipay with it, and then pays the employee the balance as salary for that month.
Earnipay charges employees a nominal processing fee of ₦250 or ₦500 for this access. There are no refunds or interest charges because employees have access to what they worked for, their own money, as opposed to a loan.
Employers can register for Earnipay through the web platform to access the employer dashboard and add their employees in a simple process.
With seed funding, Earnipay will accelerate the development of its technology platform to serve large enterprise employers. The company plans to offer its pay-on-demand solution to 200,000 employees by the end of 2022.
Speaking about the funding round and the recent launch of Earnipay, Onwuzulike said, “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 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 no cost to their business.
Onwuzulike believes that the future of pay is “on-demand” and that Earnipay is poised to be at the forefront of this revolution within the African workforce.
Access to wage on demand is a huge opportunity in Africa. With over 70% of Africa’s workforce, or 500 million people, being paid every 30 days and living paycheck to paycheck, 40% of the workforce is trapped in an endless cycle of debt as she struggles to match her income to her daily expenses, emergencies, and opportunities.
Earnipay officially launched its operations in January 2022, having been in development and beta testing since September 2021. Since its beta operation, Earnipay has served over 20 corporates, outsourcing companies and HR solution providers in Nigeria, including Eden Life and Thrive Agric, whose employees used the app to access their pay more than 1,000 times, indicating strong demand for the solution.
“We’ve seen access to earned wages growing rapidly in many markets and we think it’s a natural fit in Africa,” said Brendan Dickinson, partner at Canaan. “Earnipay has quickly established itself with a product designed specifically for payroll behaviors in this region, and early adoption by employers is very strong. We are delighted to have the opportunity to partner with them.