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Human resources and communications technology start-up SmartWage raised $2 million in an oversubscribed seed funding round that drew participation from Idris Bello (founding partner of LoftyInc Capital), Creator Collective Capital, Penrose Capital, alongside angel investors.
This funding validates SmartWage’s vision of transforming Africa’s workforce through digital inclusion.
SmartWage CEO, Simon Ellis, says that no solution adequately addresses the challenge of communicating with a distributed workforce, leaving employers unable to digitally transform.
“There is a communication gap. Frontline employees don’t feel part of a company’s brand and its promise. Payslips and leave are still done manually with paper printouts, while employee communication is done using notice boards or apps, which have huge usage drop-offs. Onboarding and disciplinary procedures are still paper-based, costing businesses precious time, money and resources,” he says.
SmartWage has developed a host of financial wellness products that give employees the financial lifeline they need. These include access to free financial education and on-demand pay.
“We have learnt through our process that employees need access to cash more than ever before. 80 percent of South Africans struggle to make it to the end of the month without relying on some form of short-term debt, and the payday loan industry is booming,” explains Ellis.
The company was founded in May 2020 and offers enterprises a simple yet effective way to digitise HR processes, helping them save time and money by giving employees without email the ability to receive company-wide communication, access their payslips, request leave and get access to financial wellness products, all via WhatsApp.
This solution addresses the 90 percent of frontline employees don’t have or don’t use email, and 97 percent of formally employed people in South Africa who use WhatsApp.
The seed funding was accessed via several influential investors. One of those investors is Idris Bello, founding partner of LoftyInc Capital, a pan-African VC fund headquartered in Nigeria, and an early investor in Flutterwave and Andela, two of Africa’s tech unicorns.
Bello said he was excited by the scalability of the SmartWage product set and the impact it could have, in both Africa and beyond the continent.
“The team at SmartWage are innovators – they’re building more than just an earned wage access product, and have recognised that in order to make a tangible impact on employers, they need to build a powerful way for employers to engage with their workforce,” he continues. “We are excited to partner with Simon, Caroline and the powerful team they’ve assembled to support SmartWage’s mission to drive digital inclusion across Africa.”
SmartWage clients include companies that employ frontline employees, typically in retail, quick service restaurants (QSR), manufacturing, construction, and hospitality. They have grown their monthly active user base 14x in the past 12 months, and now work with brands such as Edgars, KFC, Debonairs, Seattle Coffee, Truda and Twizza.