Payday, a Pan-African financial technology company issuing global (USD, EUR & GBP) accounts to Africans, has announced a raise…
Payday, a Pan-African financial technology company issuing global (USD, EUR & GBP) accounts to Africans, has announced a raise of $3 million, which it intends to use to fuel its “future of work” initiative through borderless payment alternatives in major currencies.
Moniepoint Inc., formerly TeamApt Nigeria, led the most recent seed round. Other investors in the round included Techstars, HoaQ, DFS Lab’s Stellar Africa Fund, Ingressive Capital Fund II, and angel investors like Dare Okoudjou, the CEO of MFS Africa, and Tola Onayemi, the CEO of Norebase. Following suit were established financiers like Angels Touch and Techstars.
“We are building TransferWise for Africa; we want our customers to move money faster with the bank accounts and cards we issue. Other platforms focus on Africans in the diaspora; we’re focusing on people in Africa while planning to focus on those abroad by expanding to the U.K.,”
Favour Ori, CEO and founder of Payday
“We were the first startup to start issuing virtual accounts in Africa around June 2021, and we’ve done this for over 20 months, so we know what works and understand our market and users”, he added.
The seed round becomes the latest raise for the fintech platform since launching two years ago after its pre-seed round of $1 million a few months back. The startup, which Favour Ori founded in May 2021, provides fast payments for Africans across the globe.
Also, being the first Rwandan company in history to join the prestigious Techstars Toronto Accelerator program. the two-year-old startup recently became a payment partner for SpaceX’s Starlink. The cross-border payment platform is enabling users in Nigeria and Rwanda to purchase Starlink routers.
The company claims to have helped process close to $1 million already.
Moniepoint, one of the investors in the round, expressed their excitement about partnering with what Payday is achieving in Africa. Its CEO, Tosin Eniolorunda, says Payday’s drive and path closely aligns with its goal of driving financial inclusion and facilitating cross-border payment services in Africa.
“At Moniepoint, we’re excited about the unique things Favour and the team are doing with PayDay. Personally, I connect deeply with his drive, technical depth, and desire to execute. This is something that isn’t very common, and the urge to encourage that fire inspired us to want to be a part of this,” Moniepoint CEO Tosin Eniolorunda said on the investment.
“There’s also the alignment in our goal to provide financial happiness by addressing key international payment pain points with merchants and individuals. We see a potential to leverage their infrastructure to further deepen our suite of financial services for merchants as well, and we’re looking forward to all that’s to come.”
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Payday’s recent strides
With an Initial idea to build PayPal for Africa, Favour Ori’s Payday is helping customers in 11 African countries, including Rwanda, where it first established its headquarters due to its business-friendly environment, access a remittance platform where most financial services are accessible and available.
Payday enables remote workers and freelancers in Africa, especially Rwanda and Nigeria, to send and receive money in 20 different currencies, including USD, GBP, and EUR. They can now be paid and make withdrawals in their chosen currency, as can those in the diaspora who work remotely for foreign organizations.
Additionally, the platform offers local bill payment choices, peer-to-peer payments, currency swaps, payment links, virtual dollars and naira cards (which allow Nigerian users to make purchases on foreign platforms), and virtual dollars and naira cards. Despite being commonly provided by other fintech platforms, Payday is changing the scene and forcing competitors to compete on speed and lower fees or rates.
Payday has increased its social media marketing efforts recently to gain more market dominance, and it appears to be working. The fintech now serves more than 300,000 users with its virtual cards and other products, up from just over 100,000 users at the end of 2022. According to Ori, a unicorn on the continent made a $15 million acquisition offer to Payday, which was rejected. Payday also handles an average of 40,000 transactions per day and more than $25 million per month.
The fintech’s burn rate has tripled as a result of extensive marketing. However, Ori claims that the company remains profitable (the startup achieved profitability in August 2022, according to the CEO), and its monthly revenues, which it makes by charging a fee on transactions, have quadrupled owing to its increasing user base.
Payday, which has raised more than $5 million since its launch, will now try to obtain operational licenses in the U.K. and Canada while establishing activities in the former, where the startup has recently been incorporated. The fintech, which has offices in Kigali and Vancouver, will step up marketing efforts and bring on more staff as it looks to grow from 35 to 50 workers in the upcoming weeks.
It already made fresh additions to its founding and executive team, which initially comprised Ori, who ran Payday as a solo founder for 18 months. Elijah Kingson joined the company as co-founder and CPO from global fintech Revolut while Yvonne Obike, the company’s current COO who had previous stints with Nigeria’s Bank of Industry, now wields a co-founder title. Sean Udeke, an ex–Goldman Sachs and Expedia product manager, works at the fintech as its new head of products, where he might 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 spend behaviours and use that to offer loans,” said Ori, who also ran the now-defunct tech outsourcing platform WeJapa before stepping down following allegations of misconduct. “That’s going to be the future for us. We also want to issue credit cards where if you’re a student trying to go to the U.S., you can start building your credit from Nigeria with Payday.”