Workpay, the cloud-based HR, payroll and benefits platform for organisations with employees across Africa, today announces that it has raised $5m in a Series A funding round led by Norrsken22. The round also includes participation from Visa, Y Combinator, Saviu Ventures, Axian, Plug n Play, Verod-Kepple Africa Ventures and Acadian Ventures, a venture firm which specialises in investment into the next generation of work technologies. This follows Workpay’s successful pre-series A round of $2.7m in early 2023.

Businesses across Africa grapple with a dynamic employment landscape, navigating diverse regulations, dispersed employees, and hybrid workplaces. Payroll is time-consuming for Small and Medium Businesses (SMBs), with 80% of SMBs still handling payroll manually on Excel and Google sheets. This process is prone to errors and leads to lost money, weak compliance and potential penalties. Many lack the resources to implement or support complex systems. On-premises third-party payroll solutions offer limited capabilities, while enterprise-focused software can be costly and cumbersome. Globally, SaaS solutions have been successful at simplifying the process for Western businesses, but struggle to serve African business due to the need for localisation across the 54 countries and price sensitivity on the continent.

Co-founded by Paul Kimani and Jackson Kibigo, Workpay offers a comprehensive cloud-based payroll and HR SaaS platform that manages the entire journey of employees and contractors, from onboarding to offboarding. It includes features like payroll processing, time tracking, leave management, expense tracking, performance management, employee benefits administration and Employer of record (EOR) services among others. It already has a great foundation with 1000+ businesses across 20+ countries on the African continent on the platform, and is looking to provide the future of employee financial services and benefits.

Africa is poised to have the largest working age population by 2050 and the rise in remote work and talent shortages in other markets is driving demand for services outsourcing in Africa, which will lead to increased demand for African talent. Workpay is strategically positioned to help companies on and off the continent pay their employees compliantly while providing much-needed financial services to employees.

Paul Kimani, CEO of Workpay says, “Our goal is to become the go-to solution for employers and employees in managing HR, payroll, and work-related benefits. Our deep understanding of regulation across the African continent allows businesses working across multiple countries to manage payroll and tax using a single integrated platform. This raise will support Workpay to reach profitability, a huge milestone for our company.”

Ngetha Waithaka, General Partner at Norrsken22 says, “Our investment in Workpay offers an exciting opportunity to revolutionise how Africa’s SMEs carry out their employee management. Africa boasts one of the largest working age populations in the world and they remain grossly underserved by existing HR and payroll tools. With the addition of integrated financial services, Workpay’s potential for growth is immense.”

Thomas Otter at Acadian Ventures says, “We are excited to expand our investment in Workpay. The company has developed the most comprehensive, modern HR and payroll platform and are poised to become the market leading HR platform across Africa over the next decade.”

Ryosuke Yamawaki, Partner at Verod-Kepple Africa Ventures says, “Over the years, we have witnessed the leadership team’s exceptional business capabilities to evolve a single-industry focused product to a one-of-a-kind platform that cuts across all HR needs of African businesses. We are excited, again, to be part of this round and join the journey to revolutionise how human resource management is supposed to be done in Africa.”

Workpay will use the money raised to aid their expansion across the continent and build out its financial services provision.