Nigerian Startup Earnipay raises $4M in funding to create a faster way for Nigerians to access their salaries

EarniPay, a fintech startup that provides flexible and on-demand salary access to income earners, has closed $4 million in seed funding led by early-stage venture capital firm Canaan, according to TechCrunch.

Other participants in the funding round include XYZ Ventures, Musha Ventures, Ventures Platform, Village Global, and Paystack CEO Shola Akinlade.

Although Earnipay only launched last month, after being in beta since September 2021, the startup plans to offer on-demand salary solutions to up to 200,000 employees by the end of this year.

Before now, a few businesses sought to solve this issue to allow salary earners access to their income at their disposal.

Founder and CEO of Nonso Onwuzulike started this company to enhance the African workforce, most of which receive their salaries monthly. Unlike most developed countries that offer weekly or bi-monthly salaries to workers, most African salary earners only receive their low-income monthly. Due to the wide time gap between a month and the other, most income-earners are forced to take salary advance or borrow money from lenders to meet immediate personal needs, which throws them into a debt cycle.

Onwuzulike experienced this problem first-hand when he ran a waste collecting and recycling business in Ghana. He paid his workers every month, something they were not accustomed to. Some of his workers complained about this arrangement until he solved the problem by developing a new payment plan that paid workers weekly or bi-weekly.

“There were adverse effects of that long wait time between pay cycles, especially for these people who didn’t earn a lot of income,” said Onwuzulike. “They ended up not being productive because they had money issues and it led to attrition and retention problems for me because these were guys who are used to getting paid immediately, but I was paying them once a month, and it didn’t make sense to them.”

A recent survey showed that about 80 percent of income-earners who worked in the formal sector preferred having flexible access to their salaries compared to a one-time fixed salary.

Since the beta phase, Earnipay has served over 20 businesses, outsourcing firms, and HR solution providers within Nigeria. Some of its clients include Thrive Agric and Eden Life.

“We are super bullish on the product that we were building. Our goal is financial wellness for all and we want to build products in line with that.”