Naspers has made an R15 million ($1 million) investment in Floatpays, an on-demand earned wage access platform that helps clients improve financial wellbeing, through its R1.4 billion early-stage innovation investment vehicle Naspers Foundry.

“We welcome the support of and partnership with Naspers Foundry that will enable us to fulfil our vision of enabling South Africans to achieve financial well-being. Floatpays provides much-needed access to funds to ordinary people and a growing suite of other financial services, fostering a more productive and healthier workforce with greater financial security,” Simon Ward, founder and CEO of Floatpays, said.

Why The Investors Invested

Phuthi Mahanyele-Dabengwa, South Africa CEO of Naspers, comments: “We’re excited to invest in and support Floatpays in its aim to help people avoid debt and provide support to South Africans during these challenging economic times. Financial inclusion is important to us, being well-aligned with our purpose of using technology to improve people’s everyday lives, and our commitment to help our country towards economic recovery.”

Read also For The Second Time, Naspers Foundry Goes For Insurtech, Pours $11m Into  Naked Insurance

Fabian Whate, head of Naspers Foundry, says: “On-demand earned wage access is fast-growing within the fintech sector. While still nascent in South Africa, there is significant potential for Floatpays, which is focused on serving the underbanked. We’re delighted to partner with the Floatpays team, who have a proven track record of success in early-stage tech businesses, particularly in fintech.”

Since its inception in 2019, Naspers Foundry has made three fintech investments and completed nine transactions.

Floatpays’ aim, according to Naspers, is to help clients achieve financial well-being by helping them move from debt to savings by improving access to their wages, budgeting, and financial knowledge. Floatpays’ technology interfaces with a firm’s existing payroll system, allowing employees to receive a portion of their earned pay at any moment during the compensation cycle, according to the company.

Read also Egyptian Super-API For Payments MoneyHash Lands $3m Pre-seed

According to Naspers, more than a quarter of clients polled in the Wellness Warehouse Case Study in 2021 stated the earned wage access platform helped them avoid payday loans.

According to the same poll, 88 percent of users stated they were better off financially as a result of utilizing the network.

A Look At What Floatpays Does

Floatpays helps clients lessen their reliance on debt, start saving, and develop skills to better manage their money. The startup was founded in 2019 by Simon Ward.

Customers can have real-time access to a portion of their unpaid income at any moment during the month using Floatpays, giving them an alternative to using credit to cover unexpected needs.

According to a statement, the Floatpays solution can help employees avoid costly credit, payday lenders, and borrowing from family or friends when they need money to get through the week.

Read also Cameroonian Fintech Startup Maviance Secures Additional Funding From Finafrik 

Floatpays also aids companies, allowing them to assist their employees in achieving financial wellbeing, according to Naspers.

Employees can use the Floatpays solution via an iOS, Android, or USSD app on their smart and feature phones. Employees can also use Floatpays’ immediate money vouchers or electronic funds transfers to access their withdrawals.

Employees can use their earned income to purchase pre-paid vouchers for mobile internet, airtime, power, or medical care through the app or USSD.

Floatpays wage Floatpays wage

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

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.

Read also With New Fintech Licenses, Ride-hailing Startup Safeboda Is Set For Mobile Money In Uganda

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.

Read also One Payment Gets Regulatory Licence for Payment Services in Nigeria

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