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Payday seeks $3M from Moniepoint Inc. to fuel Africa’s future of labor.

Photo: Payday

Payday, a neo bank that issues worldwide (USD, EUR, and GBP) accounts to Africans, collected $3 million to fuel its “future of work” campaign through borderless payment choices in major currencies.

The U.S. company that owns Moniepoint Microfinance Bank and TeamApt Nigeria led the oversubscribed initial investment. Techstars, HoaQ, DFS Lab’s Stellar Africa Fund, Ingressive Capital Fund II, and angel investors like Dare Okoudjou and Tola Onayemi also invested. Techstars and Angels Touch invested too.

Favour Ori established Payday in June 2021 with $1 million in pre-seed capital to construct PayPal for Africa. The network allowed customers in 11 African nations to transmit money, including Rwanda, where it originally built its headquarters due to its business-friendly climate. However, the first Rwandan fintech to join Techstars (Toronto program) discovered that cross-border payments were pricey after raising a $1.2 million pre-seed extension. As a result, it closed nine routes and concentrated on Nigeria, where transaction volume and user growth have increased.

Nigerian and Rwandan freelancers and remote employees may send and receive USD, GBP, EUR, and 20 other currencies using Payday. In addition, they and diaspora workers for multinational organizations can be paid and withdraw money in their preferred currency. Payday offers currency exchanges, payment linkages, local bill payments, peer-to-peer transfers, and virtual dollar and naira cards, which allow Nigerians to shop abroad. Several VC-backed B2C financial applications servicing African and diaspora users, such as Grey, Lemonade Finance, Send by Flutterwave, and Chipper Cash, all provide these functionalities. Each tries to outdo the other with speed and lower fees or rates.

TransferWise is creating for Africa to let consumers move money quicker using our bank accounts and cards. “Other platforms focus on Africans in the diaspora; we’re focused on individuals in Africa while aiming to focus on those outside by expanding to the U.K.,” Ori told TechCrunch in an interview about Payday’s role in Africa’s remittance and global neo-banking market. “We were the first startup to issue virtual accounts in Africa around June 2021, and we’ve done this for over 20 months, so we know what works and understand our market and users.”

Payday’s social media marketing strategy appears to be working. The fintech currently has over 300,000 customers for its virtual cards and other goods, up from 100,000 in 2022. According to Ori, one of the continent’s unicorns offered $15 million to acquire Payday, which conducts an average of 40,000 transactions every day and over $25 million monthly.

Marketing has increased the fintech’s burn rate. Nonetheless, Ori maintains that the firm remains profitable (the CEO says it attained profitability in August 2022) and that its monthly revenues, which it derives by charging a charge on transactions, have doubled due to its growing user base. The two-year-old firm also enabled Nigerian and Rwandan Starlink router purchases as a payment partner. As a result, the firm has processed about $1 million.

“Moniepoint is pleased about Favour and PayDay’s innovative approach. I like his determination, technical depth, and execution. “This isn’t very common, and they want to nurture that fire that motivated us to want to be a part of this,” Moniepoint CEO Tosin Eniolorunda said of the investment. “We also aim to eliminate merchant and consumer international payment pain points to provide financial bliss. We’re excited to use their infrastructure to expand our merchant finance services.

Payday will seek a U.K. operating license after raising over $5 million. And Canada, where the startup was just incorporated. As it grows from 35 to 50 workers in the next weeks, the Kigali and Vancouver fintech will increase marketing and hiring. After 18 months of Ori running Payday alone, it added new founders and executives. Elijah Kingson, co-founder and CPO from global fintech Revolut, and Yvonne Obike, COO from Nigeria’s Bank of Industry, are co-founders. As the fintech’s new head of products, Sean Udeke, a former Goldman Sachs and Expedia product manager, may supervise loans and credit cards.

“We’re supporting the future of work by targeting remote employees and freelancers, and we want to be able to monitor customer and expenditure patterns and utilize that to provide loans,” said Ori, who operated the now-defunct tech outsourcing portal WeJapa. “That’s our future. We also want to provide credit cards so Nigerian students wishing to move to the U.S. may start developing credit with Payday.

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