Payday wants to propel the future of work in Africa with a $3 million seed led by Moniepoint Inc
Payday, a neobank issuing global accounts (USD, EUR, and GBP) for Africans, has raised $3 million, money the platform intends to use to power its “future of work” initiative through wireless payment alternatives. borders in major currencies.
The oversubscribed seed investment was led by Moniepoint Inc. (formerly TeamApt Inc), the US entity that houses Moniepoint Microfinance Bank and TeamApt Nigeria. Other investors participated including Techstars, HoaQ, DFS Lab’s Stellar Africa Fund, Ingressive Capital Fund II, and angel investors such as MFS Africa chief Dare Okoudjou and Norebase CEO Tola Onayemi. Existing investors like Techstars and Angels Touch followed suit.
When Favor Ori launched Payday in June 2021, the initial game was to create PayPal for Africa, for which it secured $1 million in pre-seed funding. Customers from 11 African countries, including Rwanda, where it first established its headquarters due to its business-friendly environment, had access to the platform and could send money to each other. Subsequently, the fintech, which became the first Rwandan company to join Techstars (Toronto program), learned that enabling cross-border payments was expensive despite lifting a $1.2 million pre-seed extension . As such, it closed nine corridors and focused on Nigeria, where it has since seen tremendous transaction volume and user growth.
With Payday, remote workers and freelancers in Africa, including in Nigeria and Rwanda, can send and receive money in USD, GBP and EUR, as well as 20 other currencies. This allows them and members of the diaspora who work remotely for international organizations to get paid and withdraw money in the currency of their choice. Payday also offers virtual cards in dollars and naira (which allow Nigerian users to buy goods and services on foreign platforms), currency exchanges, payment links, local bill payments and transfers between peers. These features are typically provided by other VC-backed B2C fintech apps serving African and Diaspora clients, such as Grey, Lemonade Finance, Send by Flutterwave, and Chipper Cash, making the competitive landscape where everyone is trying to outperform. the other with speed and better fees or rates.
“We are building TransferWise for Africa; we want our customers to transfer money faster with the bank accounts and cards we issue. Other platforms focus on Africans in the Diaspora; we are focusing on people in Africa while planning to focus on those overseas as we expand into the UK,” Ori told TechCrunch during an interview about Payday’s place in remittances in Africa and in the global neo-banking space. “We were the first startup to start issuing Virtual Accounts in Africa around June 2021, and we’ve been doing it for over 20 months, so we know what works and understand our market and our users.”
Payday has ramped up its social media marketing campaign over the past few months to increase its market share, which appears to be paying off. While the fintech ended 2022 with just over 100,000 users, it now offers its virtual cards and other products to over 300,000 users. Payday also processes an average of 40,000 transactions per day and more than $25 million per month, figures that have subjected the fintech to a $15 million takeover bid by one of the continent’s unicorns, which according to Ori, was refused.
Fintech burn rate has tripled following heavy marketing. However, Ori says the company remains profitable (the startup hit profitability in August 2022, according to the CEO), and its monthly revenue, which it makes by charging fees on transactions, has quadrupled due to its base. growing number of users. Likewise, the two-year-old startup has become a payment partner for SpaceX’s Starlink, allowing users in Nigeria and Rwanda to purchase Starlink routers. The company says it has already helped process nearly $1 million.
“We at Moniepoint are excited about the unique things Favor and his team are doing with PayDay. Personally, I connect deeply with his drive, technical depth and desire for execution. It’s something that isn’t very common, and the urge to encourage this fire made us want to be part of it,” Moniepoint CEO Tosin Eniolorunda said of the investment. “There is also alignment in our focus to provide financial happiness by tackling key international payment issues with merchants and individuals. We see potential in leveraging their infrastructure to also deepen our range of financial services for merchants, and we look forward to all what’s going to happen.
Having raised more than $5 million since inception, Payday will now seek operational licenses in the UK and Canada while developing operations in the former, where the startup was recently incorporated. The Kigali and Vancouver-based fintech will also step up its marketing efforts while hiring more talent as it plans to grow from 35 to 50 employees in the coming weeks. He has already made new additions to his founding and executive team, which initially included Ori, who ran Payday as a solo founder for 18 months. Elijah Kingson joined the company as co-founder and CPO of global fintech Revolut, while Yvonne Obike, the company’s current COO who previously worked with Nigeria’s Bank of Industry, now holds the co- founder. Sean Udeke, a former product manager at Goldman Sachs and Expedia, works at fintech as its new product manager, where he could oversee new offerings such as loans and credit cards.
“We’re supporting the future of work by targeting remote workers and freelancers, and we want to be able to study customer and spending behaviors and use that to offer loans,” said Ori, who also ran the platform. now defunct tech outsourcing company WeJapa. before resigning following allegations of misconduct. “It’s going to be the future for us. We also want to issue credit cards where if you are a student trying to go to the US you can start building your credit from Nigeria with Payday.
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