Kenyan HR and payroll startup Workpay lands Visa as investor in $5M round


Businesses across Africa face challenges managing payroll, especially in a landscape with different regulations, remote employees, and hybrid workplaces. About 80% of small and medium-sized businesses still use Excel and Google Sheets as they can’t afford or maintain complex payroll systems. 

Here’s why: On-site third-party solutions offer limited features, while software designed for large companies can be expensive and difficult to use. Global companies like Rippling and Gusto have made payroll easier for international businesses, but they struggle to work well in Africa. 

That’s where local-based solutions such as YC-backed Workpay come in and thrive.

Workpay provides cloud-based HR, payroll, and benefits solutions for businesses with employees across Africa, serving two main customer types. First, for local businesses with 20-100 employees operating within a single jurisdiction, like a manufacturer in Nigeria or a grocery shop in Kenya, Workpay provides HR and payroll solutions to manage their workforce. Then, for businesses with 100 to 1,000 cross-border employees, such as a company in Uganda hiring in South Africa, Workpay also helps ensure employee compliance across different markets. 

Co-founder and CEO Paul Kimani says that small-to-medium-sized businesses prefer more comprehensive, full-stack solutions instead of juggling multiple systems, both for simplicity and cost: Using separate solutions for the same department means they spend more, as they have to pay for each piece of software individually.

Workpay has adjusted accordingly over the years. Initially, the five-year-old startup focused on payroll but has since expanded its offerings, responding to customer feedback as it scaled.

Features such as time and attendance tracking are used mainly by businesses like manufacturing, where monitoring employee hours is essential. Conversely, remote work businesses are less interested in tracking physical presence — they want to measure employee performance, which Workpay’s performance management feature addresses.

“The shift in customer needs has pushed us to expand our product from being a solid payroll solution to offering a more full-stack HR service. We’ve also noticed an opportunity to layer financial services on top of our HR offerings,” said Kimani, who founded Workpay with COO Jackson Kungu. “Since companies already use us to pay their employees, we can now provide added services like medical and vehicle insurance and even partner with providers for lending, savings, and investment options. This way, we offer a more comprehensive solution that meets the broader needs of our customers and their employees.”

Now, the startup has raised $5 million in Series A funding led by pan-African venture capital firm Norrsken22 with new participation from Visa, as well as a bunch of re-ups from current investors: Y Combinator, Saviu Ventures, Axian, Plug n Play, Verod-Kepple Africa Ventures, and Acadian Ventures. 

Visa’s involvement in this funding round is significant. Last November, the global payments giant launched its fintech accelerator, selecting 23 startups for its inaugural cohort while providing mentorship, training, and funding through its partners.

So far, only Workpay has publicly secured funding from Visa upon completing the program. “After the program, I think they invested depending on how they see a startup from a strategic and growth perspective,” co-founder and CEO Paul Kimani revealed to TechCrunch on a call. 

The surge in demand for payroll and HR solutions across Africa comes as global companies extend their reach into emerging markets. This month, New York-based fintech Payoneer bought Skuad, a Singapore-based global HR and payroll startup, for $61 million. Earlier this year, in March, Deel acquired South Africa-based PaySpace for slightly over $100 million.

Workpay and other local platforms, including SeamlessHR, PaidHR and Bento, will have to deal with the competition that such entries bring. However, Kimani views the rise in global competition as an affirmation of the market’s potential.

“We’re not overly concerned about competition from global players. There is still significant work to be done across Africa, both by external companies and ourselves. Building a comprehensive payroll solution for the entire continent is challenging—each country has its regulations and requirements,” the CEO said. “Payroll in Ivory Coast differs from South Africa. It will take time for global companies to adapt their products to the diverse African market. Therefore, in the short to medium term, we believe that competition from these global players won’t be a major concern for us or others in our space.”

In the meantime, Workpay is scaling as fast as it can, and claims to have added nearly 500 businesses to its platform in the past 16 months, and now serves more than 1,000 customers across 20 African countries. This growth came even as the company delayed its expansion into Francophone Africa, which would have doubled its reach from 20 countries to 40. Similarly, the company claims its revenue grew 1.5x in the first six months of 2024 and is on course to double by the end of the year.

Kimani says Workpay will use the new funding to expand its financial services offering (exploring new products to enhance how employers and employees interact with salaries), advance its performance management tools with AI to improve how businesses manage their teams, and continue to grow its workforce. 

The Norrsken-led round follows a $2.7 million pre-Series A round last year (in which the Norrsken Foundation participated) and a $2.1 million seed round in 2020. Other participants in this round include existing investors Y Combinator, Saviu Ventures, Axian, Plug n Play, Verod-Kepple Africa Ventures, and Acadian Ventures. Workpay has received nearly $10 million in funding since its launch in 2019. 



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