Payday raises $3 million Seed funding to drive product expansion

Payday, a fast-growing pan-African neo-bank, has announced a $3 million Seed round led by Moniepoint Inc (formerly TeamApt).

HoaQ, DFS Lab's Stellar Africa Fund, Ingressive Capital Fund II and angel investors participated in the round. The angel investors who participated in Payday's seed round are Dare Okoudjou, Founder and CEO of MFS Africa and Tola Onayemi, CEO of Norebase. In addition, existing investors, Techstars, Angels Touch, Ingressive Capital & Now Venture Partners, made follow-on investments in this round​​.

This new round of funding brings Payday's total investment to $5.1 million, following the over $2 million pre-seed round closed in 2021.

In June 2021, Favour Ori launched Payday from Rwanda to facilitate global payments from and to Africa, with a widespread use case for remote African workers to receive payments from their employers and spend anywhere in the world. Its incorporation in Rwanda and admission into Techstars Toronto accelerator made it the first time the latter admitted a Rwandan startup into its three-month accelerator programme.

Today, the fintech startup allows those on the continent and in the diaspora to send and receive money in 23 currencies, including USD, GBP, and EUR, from over 130 countries. Thus, Africans who work remotely can receive their money in foreign currency and withdraw in the currency of their choice using virtual Mastercard and Visa cards.

Alongside Rwanda, Payday is operational in Nigeria and, more recently, the UK. Less than two years after its founding, in January 2023, it launched version three of its product, Payday 3.0, signalling an evolution into a super app with features such as local bill payments, virtual naira cards, and payment links.

In February 2023, Payday became a payment partner for Starlink, operated by SpaceX. Thus, it provides a payment method for its users in Nigeria and Rwanda, where Starlink can be purchased on the continent.

According to a statement shared with Benjamindada.com, Payday processes an average of 40,000 transactions per day. These transactions are worth over $25 million, and the company now serves 330,000 users.

Speaking on Moniepoint's first-time investment in the company, CEO Tosin Eniolorunda says, "At Moniepoint, we're excited about the unique things Favour and the team are doing with Payday. Personally, I connect deeply with his drive, technical depth, and desire to execute. The urge to encourage that fire inspired us to want to be a part of this.

More important is the alignment in our goal to provide financial happiness by addressing key payment pain points—Moniepoint with merchants and Payday with individuals. We see a potential to leverage their infrastructure further to deepen our suite of financial services for merchants, and we're looking forward to all that's to come".

The new capital raised is for licensing to get their UK entity and operations off the ground while expanding to Canada. The company will also grow its talent base by 40% to 50 employees, many of whom will come into its customer success department. Yet, the round sees two new talents join its co-founding team, Elijah Kingson, Payday's CPO and Yvonne Obike, Payday's COO. Elijah previously led product design for subscription products at Revolut, the London-based neo-bank with over 25 million customers. Yvonne drove MSME growth at Nigeria's Bank of Industry, the country's oldest and most significant development institution.

Commenting on the new round, Favour Ori, CEO and Founder of Payday, said, "This investment represents a significant milestone for our company, and we are grateful for the trust and commitment shown by our existing and new investors.

We're thrilled that this round of funding will lay the foundation for the continued growth of our platform as we expand our services to a wider audience.

Our passion for empowering individuals and businesses with convenient and secure payment solutions is tangible. This funding will allow us to do so even more."

Maya Horgan-Famodu, Founder and MD at Ingressive Capital, said, "Favour is one of the savviest entrepreneurs I have met. He knows how to assess, execute, and pivot exactly when necessary. Hence why Payday has seen such explosive growth. This is certainly a gem in our portfolio. I'd bet on Favour and Payday again any day, both to realise the transformational value and also to make us proud with an exit the ecosystem will reference for years to come".

"A word that best describes Favour Ori is relentless," says Sunil Sharma, Managing Director of Techstars Toronto and one of the earliest investors in Payday. I was struck by his personal story which took him from Nigeria to the US for his computer science degree and some valuable early work experience, then to Rwanda to establish a team, then to the UK and back to the US in pursuit of growth. Favour is always in search of opportunity and nothing can get in his way".

The news about Payday's intention to raise capital broke earlier this month, and today's announcement has confirmed it but at double the reported amount. The company's decision to expand to the UK, and Canada, places it squarely in a fight for remittance and cross-border payments market share with the likes of Send by Flutterwave, Kuda, Afriex, and Lemonade Finance.

We expect the pie to get larger as more Nigerians and Africans emigrate and continue to send money back home.

Who will emerge as the market leader?

Editor's note:

April 3, 2023: This article was updated to include the worth of the transactions that Payday processes monthly.