Kenyan HR and payroll platform Workpay has recently raised $8.8 million in a new funding round, Launch Base Africa has learned. This substantial investment underscores the growing confidence in Workpay’s innovative solutions designed to streamline workforce management across the continent. While the specific investors remain undisclosed, the funding round signifies a major milestone for the Y Combinator-backed company, enabling it to accelerate its expansion and introduce cutting-edge HR technology to empower businesses and employees throughout Africa.
This investment comes amidst significant growth in the HR-payroll market, with industry analysts projecting a compound annual growth rate of 9.2% and an expected market value of $14.31 billion by the end of the decade. The increasing demand for streamlined HR and payroll solutions, particularly among small and medium-sized businesses, is driving this growth.
Workpay, which previously raised $2.7 million in a pre-Series A round in February 2023, has become a prominent player in this market. The company is focused on capitalizing on the growing demand for HR-payroll technology in emerging markets.
In a recent interview, Workpay co-founder and CEO Paul Kimani outlined the company’s ambitious plans, including expanding into new markets with a new payroll engine and launching an API to enable accounting firms and other entities to offer payroll services to their clients.
Kimani expressed confidence in Workpay’s potential for market leadership in Africa, emphasizing the company’s technological infrastructure and strategic partnerships. He also highlighted the importance of compliance in navigating the diverse regulatory environments across the continent.
Founded in 2019 by Jackson Kibigo, Paul Kiman, Workpay offers a comprehensive suite of HR-payroll tools, including salary payments in local currencies across Africa, tax filing, and employee benefits processing. The platform also includes features for time and attendance tracking, leave management, and expense requests.
One notable feature of Workpay’s platform is its flexibility in allowing employees to receive salaries in their preferred accounts, regardless of their employer’s banking affiliations. This approach enhances convenience and financial inclusivity for workers.
In addition to its core HR and payroll offerings, Workpay has expanded into financial services, providing linkages to investment accounts, medical and asset insurance, and earned-wage access for employees facing emergencies or unexpected bills.
Workpay’s growth has been substantial, with a significant increase in revenue and customer acquisition following the economic slowdown caused by the COVID-19 pandemic. The company reports doubling its revenue annually since 2021 and is currently serving over 1000 customers. WorkPay also processes over $200 million in total payroll value for its clients annually.
Thomas Otter, a general partner at Acadian Ventures, one of Workpay’s previous investors, commended the company’s progress, stating, “Workpay is building a top-notch product, meeting the specific needs for HR and payroll in Sub-Saharan Africa. The addressable market in the region is growing rapidly, and HR and payroll systems provide the foundation for fair and accurate pay.”
In 2023, after securing $2.7 million in pre-Series A funding from various investors, including Launch Africa, Saviu Ventures, and Acadian Ventures, Workpay expanded to Morocco. The company had previously secured $2.1 million in initial investment in 2020.
Workpay’s expansion and continued growth position it as a key player in shaping the future of HR-payroll solutions in Africa and potentially beyond.
Editor’s Note: WorkPay’s latest filing with the U.S. Securities and Exchange Commission disclosed that the company raised $8.8 million early June this year, despite officially announcing a $5 million Series A investment on August 22, 2024. The Series A round was reportedly led by the pan-African venture capital firm Norrsken22, with notable new participation from Visa and Plug and Play, alongside reinvestment from existing backers such as Y Combinator, Saviu Ventures, Axian, Verod-Kepple Africa Ventures, and Acadian Ventures.
