Earnipay, a fintech solution that provides flexible and on-demand salary access to income earners, has closed a seed round of $4 million.
The round was led by Canaan, with participation from XYZ Ventures, Village Global, Musha Ventures, Ventures Platform, Voltron Capital, and Paystack CEO Shula Akinlid.
Speaking about the funding round and the recent launch of Earnipay, Nonso Onwuzulike, CEO Earnipay says, “Financial concerns are the main cause of distractions in the workplace. The monthly pay cycle means that employees are often unable to afford day-to-day expenses, cover emergencies, or take advantage of immediate financial opportunities.”
As a result, they become vulnerable to predatory payday loans and get stuck in endless debt cycles with unrealistic repayment periods and exorbitant interest rates. Earnipay exists to address this issue and offer an ethical alternative to instant payroll access while helping employers improve employee engagement and retention, at no cost to their business. “
Earnipay, founded by Nonso Onwuzulike, 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 their accumulated salaries and withdraw them via the app on any day of the month. At the end of the month, the employer deducts the amount withdrawn from the employee’s salary, returns it to Earnipay, and then pays the employee the remaining balance as salary for that month.
Earnipay charges employees a small processing fee of 250 or 500 naira for this access. There is no refund and no interest because the employees get what they worked for, their own money, unlike a loan.
Employers can sign up to Earnipay via its web platform to gain access to the employer dashboard and add their employees in a simple process.
With the funding raised, Earnipay will accelerate the development of its technology platform to serve large enterprise employers. By doing so, the company will provide employees with the tools they need to make better financial decisions and improve their quality of life. It also plans to offer its on-demand salary solution to 200,000 employees by the end of 2022.
Onwuzulike believes the future of salary is ‘on demand’ and Earnipay is poised to be at the forefront of this revolution within the African workforce.
Thus, access to on-demand salary is a huge opportunity in Africa. With over 70% of Africa’s workforce, 500 million people, getting paid every 30 days and living from paycheck to paycheck, 40% of the workforce is trapped in an endless cycle of debt as they struggle to match their income with their daily expenses and emergencies, and opportunities.
Earnipay officially launched its operations in January 2022, having been in development and beta testing since September 2021. Since the trial run, the company has served more than 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 paychecks several times, thus, indicating a strong demand for the solution.
“We have seen access to wage earnings grow rapidly in many markets and believe it is a natural fit in Africa,” said Brendan Dickinson, Partner at Canaan.
“Earnipay has quickly established itself with a product that is tailored to the payroll behaviors in this region, and early employer uptake is very strong. We are pleased to have been given the opportunity to partner with them.”