Johannesburg-based startup SmartWage, which gives employees instant access to their earnings, has raised $347k (R6m) to power the growth and expansion of its novel payday solution across South Africa. 

Here Is What You Need To Know

• The fundraise was led by Chris Lister-James from Johannesburg-based seed investor, FiTech Ventures, whose investment philosophy, “driven by a focus on ethical disruption, financial inclusion, doing well by doing good and profit with a purpose,” fits naturally with SmartWage’s vision to tackle South Africa’s enormous and crippling consumer debt crisis.
• Having been fully self-funded up to this point, this marks the first time that SmartWage has raised from external investors. The money from this round will be primarily invested in the development and deployment of the company’s technology offering (including their unique financial literacy education solution), supporting key hires and driving rapid customer acquisition efforts as they seek to scale their offering across South Africa on the back of exciting progress during the first half of 2020.
• The company joins trailblazing South African fintech startups like Franc, uKheshe and Payflex in the FiTech portfolio and, according to Ellis, is, “hugely excited by the opportunity to operate in this community of like-minded entrepreneurs and leverage the wealth of knowledge and experience this partnership brings.”

Why The Investors Invested

According to Lister-James, “SmartWage has an ambitious, driven team focused on making a big difference in South Africa and we’re really excited to be joining them on this journey.” 

Lister-James further commented that, “SmartWage’s relentless focus on solving their customers’ pain points sets them apart from others in the space.”

Read also: Why Startup Ecosystem in Africa’s French-Speaking Countries Is The Least Funded In Africa

A Look At What The Startup Does

• Co-founded by Simon Ellis, Alex Platt and Nick Platt in 2019, SmartWage launched operations in February 2020.
• SmartWage is a social impact startup focused on financial inclusion in Africa and was started with the vision to eliminate the payday poverty cycle.
• The SmartWage solution helps employers protect their company’s cash flow and reduces administrative hassle while also taking care of their employees, through a financial lifeline that prevents employees from having to resort to risky alternatives for dealing with urgent costs, or simply to make ends meet during an increasingly difficult period. Through the SmartWage app, an employee requests access to a % of their already earned wages; SmartWage pays the requested funds directly to the employees bank account within 24 hrs; SmartWage reconciles payroll with the employer via an integration at month-end; the employee is paid their normal salary at month end, less the amounts advanced.
• To bolster these efforts, SmartWage partnered with Yoco’s Support Small campaign in early May and have offered their solution to users for free from March through June as a gesture of support. These initiatives and an encouraging uptake of the service have created significant momentum that the company now seeks to amplify with the fresh funding.

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.