South African on-demand pay provider Floatpays has secured just under US$4 million in an oversubscribed seed funding round to help it expand across Africa.
Founded in 2019 and a participant in the S21 cohort of the Silicon Valley-based Y Combinator accelerator, Floatpays is a technology platform that enables on-demand access to pay, seamless savings functionality and financial education to build employee financial wellness.
Having seen 43 per cent growth in its employer base and a 70 per cent increase in users since taking part in Y Combinator, the startup has raised a seed round worth almost US$4 million from investors including Global Founders Capital, Base Capital, Finca Ventures, Raba Partnership and 4DX Ventures, as well as angels Alan Rutledge, Shaun Hurwitz, Youcef Oudjidane and Olugbenga Agboola, the co-founder and CEO of Flutterwave.
The new investors join existing backers Founders Factory Africa, Kepple Africa Ventures, Norrsken Foundation and MFS Investments.
“The investment allows us to consolidate our position in South Africa and expand into the rest of Africa. We are accelerating the development of important features that complement our existing product, such as our new interest bearing savings account that is directly linked to employees’ paychecks,” said Simon Ward, founder of Floatpays.
Raba Partnership was an early investor or partner in the likes of Flutterwave and Yoco, and founder George Rzepecki said he was excited by the potential technology has in offering fair and transparent financial services products.
“Floatpays is a leader in the earned wage space and on their way to building the leading trusted brand across the continent. We are excited to partner with Simon and team in supporting Floatpay’s mission in becoming the financial services platform of choice for Africa’s large and growing workforce,” he said.
According to Ward, Floatpays was established as a “small company with big dreams to create a financially inclusive Africa”.
“I launched Floatpays as a social impact-driven business on a mission to help move employees out of bad debt cycles and into savings and long term financial wellness. Our mission is to educate employees on better personal finance management, support them with financial planning and saving, and give them an alternative to payday lenders or high-interest credit solutions when mid-pay cycle liquidity becomes a problem,” he said.