Workpay, a Kenyan startup providing cloud-based HR, payroll, and benefits solutions for businesses, has raised Ksh. 645 million (USD 5 million) in Series A funding. The round was led by Pan-African venture capital firm Norrsken22 with participation from Visa and Plug n Play and re-ups from current investors.
Last November, Visa launched its fintech accelerator, selecting 23 startups for its inaugural cohort while providing mentorship, training, and funding through its partners.
Workpay serves two main customer types, local businesses with 20-100 employees operating within a single jurisdiction and businesses with 100 to 1,000 cross-border employees. The company also helps ensure employee compliance across different markets.
In Africa, businesses face challenges managing payroll, especially in a landscape with different regulations, remote employees, and hybrid workplaces. About 80% of SMEs still use Excel and Google Sheets, as they are not able to afford or maintain complex payroll systems. Workpay strives to address these issues by directly focusing on tailor-made solutions for both small and medium businesses.
In terms of scalability, Workpay claims to have added nearly 500 businesses to its platform in the past 16 months, and now serves more than 1,000 customers across 20 African countries. This growth came even as the company delayed its expansion into Francophone Africa, which would have doubled its reach from 20 countries to 40.
Commenting on the business and latest funding, Co-founder and CEO Paul Kimani said, “The shift in customer needs has pushed us to expand our product from being a solid payroll solution to offering a more full-stack HR service. We’ve also noticed an opportunity to layer financial services on top of our HR offerings. 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.”
In regards to local competition, Kimani sees this as an affirmation of the market’s potential. “We’re not overly concerned about competition from global players. There is still significant work to be done across Africa, both by external companies and ourselves. Building a comprehensive payroll solution for the entire continent is challenging, as each country has its regulations and requirements,” the CEO said.