Floatpays, a South African on-demand pay provider, has raised just under $4 million in an oversubscribed early fundraising round. The fintech helps employees achieve financial wellbeing and provides a solution to companies looking to increase their employee value offering.
Global Founders Capital, Base Capital, Finca Ventures, Raba Partnership, and 4DX Ventures were among the industry heavyweights who contributed to the investment, which is critical for Floatpay’s next phase of expansion.
The seed round of fundraising attracted four angel investors. Alan Rutledge, a seed investor in over 410 startups worldwide, Shaun Hurwitz, a serial investor and business mogul, Youcef Oudjidane, the current Managing Partner of American-based venture fund investing firm Class 5 Global, and Olugbenga Agboola, the co-founder and CEO of Flutterwave, an African tech startup valued at $15 billion and affectionately known as an industry “unicorn,” are among them.
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Founders Factory Africa, Kepple Africa Ventures, Norrsken Foundation, and MFS investments are among the existing backers. Simon Ward launched Floatpays as part of Founders Factory Africa’s Build Program in 2019.
“The investment allows us to consolidate our position in South Africa and expand into the rest of Africa. We are accelerating the development of important features that complement our existing product, such as our new interest-bearing savings account that is directly linked to employees’ paychecks”, says Simon Ward, founder of Floatpays.
Why The Investors Invested
Floatpays has recorded considerable traction since it was founded. So far, the startup has achieved 43% growth of their employer base and 70% user growth.
“We are witnessing the potential technology has in offering fair and transparent financial services products. Floatpays is a leader in the earned wage space and on their way to building the leading trusted brand across the continent. We are excited to partner with Simon and team in supporting Floatpay’s mission in becoming the financial services platform of choice for Africa’s large and growing workforce”, says George Rzepecki, founder of Raba.
The fact that Floatpays was a part of the Y Combinator accelerator program in July 2021, which has funded a number of businesses that have gone on to become multi-billion-dollar firms, like Airbnb, Stripe, Dropbox, DoorDash, and Instacart, is also boosting investor confidence in this round. Floatpays is said to be the only South African startup in the Y Combinator summer class, and one of only a few in the program’s history.
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Raba, a major Floatpays backer, was an early investor in notable African fintechs including Flutterwave and Stitch, as well as a stake in South African fintech disruptor Yoco, which recently raised $83 million in a Series C round! Another heavyweight to invest in Floatpays is Global Founders Capital, the current backers of travel and tourism metasearch engine Trivago, which achieved annual revenues of roughly R4 billion in 2020.
A Look At What Floatspay Does
Founded in 2019, Floatpays according to Ward, was established as a “small company with big dreams to create a financially inclusive Africa.”
As he explains: “I launched Floatpays as a social impact-driven business on a mission to help move employees out of bad debt cycles and into savings and long term financial wellness. Our mission is to educate employees on better personal finance management, support them with financial planning and saving, and give them an alternative to payday lenders/high-interest credit solutions when mid-pay cycle liquidity becomes a problem.”
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer