Visa invests in $5 million round led by Kenyan payroll and HR startup Workpay

Workpay, a Kenyan payroll and HR firm, secures a $5 million investment round from Visa.

Aug 22, 2024 - 18:37
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Visa invests in $5 million round led by Kenyan payroll and HR startup Workpay

Payroll management is a challenge for businesses in Africa, particularly given the diverse legislation, remote workforce, and hybrid work environments prevalent in the region.

Since they cannot afford or maintain sophisticated payroll systems, almost 80% of small and medium-sized enterprises continue to operate using Google Sheets and Excel. This is the reason why: Third-party solutions installed on-site have limited functionality, and software intended for large businesses can be costly and challenging to use. Payroll has been made simpler for firms operating abroad by multinational corporations like Gusto and Rippling, yet they have trouble operating in Africa. This is the environment in which locally based solutions, like Workpay, supported by YC, flourish.

Workpay serves two primary customer types by offering cloud-based HR, payroll, and benefits solutions to companies with employees throughout Africa. Firstly, Workpay offers HR and payroll solutions to manage the workforce for small enterprises with 20–100 people operating in a single jurisdiction, such as a grocery store in Kenya or a manufacturing in Nigeria.

Moreover, Workpay assists in ensuring cross-border employee compliance for companies with 100–1,000 cross-border workers, such a Ugandan company employing in South Africa.

Over time, workpay has changed in line with this. The five-year-old firm initially concentrated on payroll but has now broadened its capabilities in response to client feedback as it has grown. Businesses in the manufacturing industry are the primary users of features like time and attendance tracking, as keeping track of employees' work hours is crucial.

On the other hand, companies that allow employees to work remotely are more concerned in measuring employee performance than in monitoring physical presence. Workpay's performance management function helps with this.

The startup has now secured $5 million in Series A funding, spearheaded by the Pan-African venture capital group Norrsken22.

New investors, including Visa and Plug n Play, have also contributed to the round, along with several existing investors, including Y Combinator, Saviu Ventures, Axian, Verod-Kepple Africa Ventures, and Acadian Ventures. Visa is one of the major sponsors of this investment round. Only Workpay has so far made public that it has received funding from Visa after finishing the program.

Meanwhile, Workpay is growing as quickly as it can. In the last 16 months, it says, it has added around 500 firms to its platform, and it currently has over 1,000 clients in 20 African nations.

This expansion would have increased the company's reach from 20 to 40 nations, but it was postponing its move into Francophone Africa at the same time as this growth.

In a similar vein, the business asserts that during the first half of 2024, revenue increased 1.5 times and is expected to quadruple by the end of the year.

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