Fintech giant Visa backs Kenya's Workpay in $5 million raise
The startup has raised new funding led by Norrsken22, with Visa joining, to streamline HR and payroll across Africa, enhancing compliance and expanding financial scope
Nairobi-based HR and payroll platform Workpay has secured $5 million in Series A funding, with support from Visa. This round, led by Norrsken22, also includes contributions from Y Combinator, Saviu Ventures, Axian, Plug n Play, Verod-Kepple Africa Ventures, and Acadian Ventures.
Visa, one of the two largest fintechs by market cap, participating in this round is interesting. The global payments platform, which recently launched a fintech accelerator program, selected the startup as first to get publicly funded in the inaugural cohort, a recognition of potential.
Paul Kimani, CEO of Workpay, says the raise will support reaching profitability, thanks in part to the fintech's involvement. Visa’s backing underscores its ability to transform the sector, and its support will be crucial in expanding its financial services.
The platform addresses a major challenge for businesses continent-wide. Varied regulations and a largely manual payroll process make managing employee compensation and compliance difficult for many small and medium-sized enterprises (SMEs). Approximately 80% of SMBs still rely on manual tools like Excel and Google Sheets, risking inefficiencies and compliance risks.
Co-founded by Paul Kimani and Jackson Kibigo in 2019, Workpay offers an encompassing cloud-based solution, including payroll processing, time tracking, leave management, and more. It caters to local businesses and those with cross-border operations, streamlining payroll across jurisdictions and currencies.
The HR and payroll sector in Africa is growing. Projections indicate a compound annual growth rate of 9.2% and an expected market value of $14.31 billion by decade’s end. Workpay’s expansion aligns with these trends, as businesses seek effective and localized payroll solutions.
The investment will enable the business to broaden its services and enhance its financial offerings. The platform supports over 1,000 businesses across 20 countries and aims to expand its reach, providing services such as insurance and earned-wage access.
Ngetha Waithaka, General Partner at Norrsken22 says the investment 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,” he adds.
Despite its success, Workpay encounters challenges unique to the diverse African market. Adapting to varying regulatory environments and infrastructural constraints poses significant hurdles. Workpay’s approach to these challenges is crucial to its ongoing success.
Kimani outlined the company’s strategy: “Our deep understanding of regulatory landscapes allows us to offer an integrated solution for payroll and tax management. This investment will support growth and help us achieve profitability.”
Global entrants like Deel and Payoneer have also targeted the African HR and payroll market, adding to the competitive landscape. While these companies bring substantial resources, they often struggle with local regulations. Workpay’s localized approach provides a competitive edge by addressing the specific needs of African businesses.
This financing reflects growing investor confidence in the market potential. With Visa's backing and plans to double on building the platform, the company positions to further leverage the increasing demand for efficient HR solutions in Africa.
