Workpay, a Kenyan startup offering cloud-based HR and payroll services, has secured $5 million in Series A funding. The company, which rebranded from TozzaPlus in 2019, plans to use this capital to expand its operations across Africa and enhance its financial service offerings.
Workpay’s platform specializes in providing human resources management and payroll solutions designed specifically for small and medium-sized enterprises (SMEs) throughout the continent.
Workpay’s key value proposition lies in its ability to streamline payroll and HR management for companies operating in multiple African countries. By integrating time-tracking, salary disbursement, and regulatory compliance features into a single platform, the company aims to help businesses eliminate inefficiencies and improve their operational efficiency.
One of the platform’s significant advantages is its capacity to combat the common problem of “ghost workers”—nonexistent employees that appear on payrolls, draining resources and inflating costs. By eliminating these and other inefficiencies associated with manual cash payments, Workpay offers SMBs a more reliable and cost-effective way to manage their workforces.
The Series A round was led by Norrsken22, with participation from notable investors such as Visa, Y Combinator, Saviu Ventures, Axian, Plug and Play, Verod-Kepple Africa Ventures, and Acadian Ventures. This follows a pre-Series A round in February 2023, where Workpay secured $2.7 million, highlighting the growing investor confidence in the startup’s business model and potential.
Paul Kimani, CEO of Workpay, emphasized the company’s commitment to becoming the leading solution for managing HR, payroll, and employee benefits in Africa. “Our goal is to become the go-to solution for employers and employees in managing HR, payroll, and work-related benefits. Our deep understanding of regulation across the African continent allows businesses working across multiple countries to manage payroll and tax using a single integrated platform. This raise will support Workpay to reach profitability, a huge milestone for our company,” Kimani said.
The funds raised in this round will be instrumental in scaling Workpay’s operations across Africa, where the demand for efficient HR and payroll solutions is on the rise. The startup plans to use the capital to expand its footprint into new markets, enhance its platform’s capabilities, and develop additional features that cater to the unique needs of African businesses.
One of the significant challenges that Workpay addresses is the lack of robust HR and payroll tools available to Africa’s rapidly growing workforce. According to Ngetha Waithaka, general partner at Norrsken22, this investment represents an opportunity to revolutionize employee management for SMEs in Africa. “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,” Waithaka stated.
Beyond payroll and HR management, Workpay is also venturing into the financial services sector, which presents a significant growth opportunity. The company aims to offer integrated financial services, such as employee benefits and financial wellness programs, which could further enhance its value proposition to businesses across the continent. By integrating these services into its platform, Workpay seeks to provide a holistic solution that addresses the full spectrum of employee management needs, from hiring to retirement.
Workpay’s success thus far reflects a broader trend of technological innovation in Africa’s SMB sector. As more businesses look to leverage technology to improve efficiency and competitiveness, platforms like Workpay are well-positioned to capitalize on this growing demand. The startup’s ability to attract high-profile investors underscores the confidence in its business model and the potential for significant returns as it continues to expand.
In the coming years, Workpay plans to deepen its market presence in key African countries while exploring opportunities in other emerging markets. The company’s focus on building a scalable and adaptable platform that meets the diverse needs of African businesses will be crucial to its continued success. With the new funding, Workpay is set to accelerate its growth trajectory, positioning itself as a leader in the HR and payroll space across Africa.
As the company scales, it will likely face challenges related to regional regulatory differences, market penetration, and competition from other HR and payroll providers. However, Workpay’s strong foundation, strategic vision, and robust backing from investors provide a solid platform from which to navigate these challenges and seize opportunities in the rapidly evolving African business landscape.