Workpay Secures $5M To Elevate African HR Tech

Workpay, a Nairobi-based HR and payroll startup, has successfully closed a $5 million Series A funding round led by Norrsken22.

The latest funding round for Workpay attracted investments from renowned firms like Visa, Y Combinator, Saviu Ventures, Axian, Plug n Play, Verod-Kepple Africa Ventures, and Acadian Ventures, a specialist in work technology innovation. This follows the startup’s successful pre-series A round of $2.7 million in early 2023 and a $2.1 million seed round in 2020. The funding enables the five-year-old startup to expand their reach and enhance HR processes for businesses throughout Africa.

Managing payroll is a complex task for many small and medium-sized businesses (SMBs) in Africa. A large percentage of these businesses, around 80 percent, still rely on basic tools like Excel and Google Sheets, as they find existing software solutions either too costly or difficult to use.

“Small-to-medium-sized businesses prefer more comprehensive, full-stack solutions instead of juggling multiple systems, both for simplicity and cost. Using separate solutions for the same department means they spend more, as they have to pay for each piece of software individually,” Paul Kimani, Workpay’s Co-founder and CEO, explains.

Workpay offers a cloud-based platform that addresses these challenges, providing HR, payroll processing, time tracking, leave management, expense tracking, performance management, employee benefits administration and Employer of record (EOR) services among others. The company serves a diverse range of customers, from local businesses with 20-100 employees to larger companies with 100 to 1,000 employees spread across multiple countries. Whether it’s a manufacturer in Nigeria or a retailer in Kenya, Workpay ensures that businesses can efficiently manage their workforce and stay compliant with local regulations.

The startup 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.

After participating in Visa’s fintech accelerator program last November, Workpay became the only startup to publicly secure funding from Visa. “After the program, I think they invested depending on how they see a startup from a strategic and growth perspective,” Kimani shared during a call with TechCrunch.

The funding will be used to scale Workpay’s offerings, particularly in expanding its financial services. “Since companies already use us to pay their employees, we can now provide added services like medical and vehicle insurance and even partner with providers for lending, savings, and investment options,” Kimani added. This move is part of Workpay’s broader strategy to evolve from a payroll provider into a comprehensive HR solution that addresses the diverse needs of African businesses.

“Since companies already use us to pay their employees, we can now provide added services like medical and vehicle insurance and even partner with providers for lending, savings, and investment options,” Kimani added. This is a part of Workpay’s plan to develop into a more comprehensive HR solution that caters to the various demands of African businesses, rather than just payroll services.

Workpay’s growth trajectory has been impressive. The startup claims to have added nearly 500 businesses to its platform in the past 16 months, bringing its total customer base to over 1,000 businesses across 20 African countries. Despite delaying its planned expansion into Francophone Africa, Workpay saw its revenue grow by 1.5x in the first half of 2024, with expectations to double by year-end.

With nearly $10 million in funding since its inception in 2019, Workpay is well-positioned to continue its expansion and strengthen its position as a leading HR tech provider in Africa. Workpay plans to use the new funding to expand its financial services, enhance its performance management tools with AI, and grow its team.