Zofi Cash, a Ugandan fintech startup, has successfully secured $1 million in funding from Advancly during a pre-seed round. This funding marks an important milestone for the startup, which aims to provide earned-wage access to employees in Africa. Founded in 2021 by Paul Kirungi (CEO) and Gordon Turibamwe (CTO), Zofi Cash is part of a growing number of African fintech companies that offer on-demand salary access to individuals on the continent.
Traditionally, many employees in Africa face the challenge of having bills arise daily while receiving their salaries only once a month. To bridge this gap, they often rely on salary advances from either their employers or banks. However, obtaining these advances can be difficult due to strict loan requirements imposed by banks or cash flow challenges faced by employers. Consequently, employees are often left with no choice but to turn to loan sharks who offer money at exorbitant interest rates.
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To address this issue, earned-wage access startups have emerged in Africa over the past five years. These startups enable employees to access a portion of their earnings before their official payday. Zofi Cash is one such startup that provides this service through a user-friendly web app. Employees can request up to 50% of their monthly salary as an advance, which, once approved by their employer, is disbursed directly into their bank account or mobile money.
Despite operating within a challenging funding environment, Zofi Cash has managed to facilitate transactions exceeding $300,000 over the past year. This impressive achievement has played a crucial role in attracting investors and raising capital. Paul Kirungi attributes their success to their commitment to ensuring that no one has to wait for their payday to receive their salary.
Currently, Zofi Cash has a waitlist of over 20,000 employees eager to benefit from their services. However, due to limited resources, the startup has only been able to cater to approximately 3,000 individuals. With the recent $1 million funding, which comprises purely debt, Zofi Cash aims to expand its reach and serve a larger number of employees in need.
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While Zofi Cash faces competition from Qiribu, a startup that entered the market a year before them, in Uganda, the startup’s ambition extends beyond its home country. If it decides to venture outside East Africa, Zofi Cash will encounter other players in the industry such as Workpay, Salad, and Earnipay, as it seeks to fulfill its mission of providing convenient earned-wage access to employees across the African continent.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard