SmartWage, a South African HR and communications technology startup, recently raised US$2 million in oversubscribed early financing round to support its vision of changing Africa’s workforce through digital inclusion, particularly for frontline employees. Several significant investors contributed to this funding round, such as Idris Bello, a founding partner of LoftyInc Capital, a pan-African VC firm based in Nigeria, and an early investor in Africa’s software unicorns Flutterwave and Andela, Penrose Capital and Creator Collective Capital, together with other angel investors.
Founded in 2020, SmartWage began by allowing businesses to offer their employees immediate access to a part of their revenues and pay for work already accomplished. It has expanded beyond that, offering organizations a straightforward yet efficient way to automate their most time-consuming HR activities, allowing them to focus on people while saving time and money. Employees without email may use WhatsApp to get company-wide communication, check pay stubs, request leave, and access financial wellness solutions.
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According to Smartwage CEO Simon Ellis, there is a communication gap between employers and employees, with frontline workers not feeling like they are a part of its brand and promise. “Payslips are still printed on paper, and employee communication is done through notice boards or apps, which have significant drop-off rates”. He stated that paper-based onboarding and disciplinary procedures cost businesses time, money, and resources.
The South African startup, SmartWage addresses these issues by reducing employers’ labour costs, and the company has also built a suite of financial wellness tools, including free financial education and on-demand compensation.
“Through our approach, we’ve discovered that employees require cash access more than ever before.” “80% of South Africans struggle to make it to the end of the month without relying on short-term debt, and the payday lending industry is expanding,” Ellis added.
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“By saving employers time and money through digitalization, we can bridge the gap between South African businesses and their frontline workers, allowing businesses to engage clearly and dynamically with their employees while also providing financial wellness initiatives.” We have a strong value proposition by providing solutions that help employers and employees.”
Idris Bello, a founding partner of LoftyInc Capital Management, expressed his enthusiasm for the SmartWage product set’s scalability and potential effect in Africa and beyond. “The SmartWage team is a trailblazer – they’re creating more than simply an earned wage access product. They’ve realized that to have a meaningful influence on employers, they need to provide an effective mechanism for companies to engage with their workforce.” We’re pleased to work with Simon, Caroline, and the rest of the SmartWage team to help them achieve their goal of driving digital inclusion across Africa,” he said.
Retail, quick-service restaurants (QSRs), manufacturing, construction, and hospitality are among SmartWage’s clients. Edgars, KFC, Debonairs, Seattle Coffee, Truda, and Twizza are among the companies that have increased their monthly active user base 14 times in the last 12 months.