Earnipay, a financial technology solution that provides flexible and on-demand salary access to income-earners, has closed a Seed round of $4 million led by Canaan and with participation from XYZ Ventures, Village Global, Musha Ventures, Ventures Platform, Voltron Capital and Paystack CEO Shola Akinlade.
With the funding raised, Earnipay will accelerate the development of its technology platform to serve large enterprise employers. By 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 on-demand salary solution to 200,000 employees by the end of 2022.
“Financial worries are the leading cause of distractions in the workplace. The monthly pay cycle means employees are often unable to afford daily expenses, cover emergencies or take advantage of immediate financial opportunities. As a result, they become exposed to predatory payday loans and get stuck in unending debt cycles with unrealistic payback periods and expensive interest rates,” Nonso Onwuzulike, CEO Earnipay, said.
Targeting employees across Africa, Earnipay officially launched its 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 offer employees the opportunity to access their earned salaries into their accounts flexibly, in real-time and interest-free.
Earnipay partners with employers and integrates with their payroll systems to offer its services to employees, who can then track and withdraw their accrued salaries via the app. Businesses are able to have complete oversight and set limits for the percentage of salaries employees can withdraw each month.
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Since operating in beta, Earnipay has served over 20 businesses, outsourcing firms and HR solution providers in Nigeria including Eden Life and Thrive Agric, whose employees have used the app to access their salary over 1,000 times, indicating a strong demand for the solution.
According to the startup, on-demand salary access is a huge opportunity in Africa, with over 70 percent of Africa’s workforce (500 million people) paid every 30 days and are living paycheck to paycheck. The 30-days pay cycle has led to 40% percent of the workforce living in an unending debt cycle as they struggle to match their income to their daily expenses, emergencies and opportunities.
African businesses struggle to provide scalable solutions for employees to access their daily salaries as they work for it due to legacy payroll process, lack of available cash flow and internal salary advance that remains to be a tedious and manual affair.
“The future of salary is on-demand, and we’re excited to be pioneering this amazing solution in Africa. With this, we will drive better access to salaries, and, importantly, improve the financial well-being of income-earners in Africa,” Onwuzulike said.
Earnipay charges employees a small processing fee of N250 or N500 for this access. There is no payback and no interest charge because employees are accessing what they have worked for, It’s their money.
With Earnipay, employers offer more financial well-being support to their employees, which in turn enables them to attract and retain top talent in an increasingly competitive employment market. In addition to on-demand salary, Earnipay provides financial education for employees to improve their financial literacy with a goal to enable them to make better financial decisions.
