Kenyan HRtech startup Workpay has recently secured $5 million in Series A funding, marking a significant milestone in its journey to become a leading provider of cloud-based HR, payroll, and employee benefits solutions across Africa. This funding round, led by Norrsken22, attracted new participation from global payments giant Visa and innovation accelerator Plug and Play, alongside contributions from existing investors. The capital injection comes at a pivotal time as Workpay aims to expand its services and enhance its offerings in response to the growing demand for HR technology solutions on the continent.

Workpay's Growth and Expansion

Founded in 2017 by Paul Kimani and Jackson Kungu, Workpay has quickly established itself as a key player in Africa’s HRtech space. The startup offers a comprehensive platform that manages payroll, HR, and employee benefits for businesses with employees spread across the continent. Since its inception, Workpay has experienced rapid growth, doubling its revenue each year and expanding its customer base to over 1,000 companies across 20 African countries. This impressive growth trajectory has been supported by prior funding rounds, including a $2.7 million pre-Series A round in 2023 and a $2.1 million seed round in 2020.

Addressing Payroll Challenges in Africa

The funding will enable Workpay to address the unique challenges that African businesses face in managing payroll and HR functions further. Many small and medium-sized businesses (SMBs) across the continent still rely on manual processes, such as Excel and Google Sheets, to handle payroll. These methods are time-consuming and prone to errors, leading to compliance issues and financial losses. Workpay’s cloud-based platform simplifies payroll management, ensuring compliance with diverse regulations across multiple African countries. It also provides features like time tracking, leave management, expense tracking, and performance management, all within a single integrated system.

Strategic Partnerships and Future Plans

Visa’s participation in this funding round is particularly notable. The global payments giant recently launched a fintech accelerator program, through which Workpay was selected to receive mentorship, training, and funding. Workpay is the first startup from this cohort to publicly secure investment from Visa, underscoring the strategic importance of its growth and market potential.

Workpay plans to use the new funds to expand its financial services offerings, enhancing the ways employers and employees interact with salaries. The company aims to introduce new products, such as medical and vehicle insurance, as well as partnerships with providers for lending, savings, and investment options. Additionally, Workpay is focusing on advancing its performance management tools with artificial intelligence (AI) to help businesses better manage their teams. The startup’s co-founder and CEO, Paul Kimani, emphasized that the shift in customer needs has prompted Workpay to evolve from a payroll solution into a full-stack HR service provider, with the added layer of financial services.

Market Leadership and Competitive Landscape

As global companies extend their reach into Africa, the competition in the HRtech space is intensifying. Recent acquisitions, such as Deel’s purchase of South Africa-based PaySpace and Payoneer’s acquisition of Skuad, highlight the growing interest in the region. However, Kimani is confident that Workpay is well-positioned to maintain its market leadership. He believes that the complexity of payroll regulations across Africa presents a significant barrier for global competitors, allowing Workpay to continue its rapid expansion. Despite delaying its entry into Francophone Africa, which would have doubled its reach to 40 countries, Workpay has still managed to add nearly 500 businesses to its platform in the past 16 months.

Workpay’s recent $5 million Series A funding round represents a critical step in its mission to become the go-to HRtech platform in Africa. With the backing of prominent investors like Norrsken22 and Visa, the startup is poised to expand its offerings, scale its operations across the continent, and continue its journey toward market leadership. As Workpay leverages its deep understanding of African regulations and its innovative approach to HR and payroll management, it is well-equipped to meet the evolving needs of businesses across the region.