SOUTH AFRICA – SmartWage, an innovative HR and communications technology startup, has raised US$2 million (R29 million) oversubscribed seed funding round.
The round will support its vision of transforming Africa’s workforce through digital inclusion, particularly for frontline employees like cashiers, restaurant staff, security personnel, and healthcare workers.
The seed funding was accessed via several influential investors. One of those investors is Idris Bello, founding partner of LoftyInc Capital, a pan-African VC fund headquartered in Nigeria, and an early investor in Flutterwave and Andela, two of Africa’s tech unicorns.
Bello said he was excited by the scalability of the SmartWage product set and the impact it could have, in both Africa and beyond the continent.
Other investors include Creator Collective Capital, Penrose Capital, along with angels from Naspers, Dimension Data, Investec, and Standard Bank. SmartWage plans to deploy the capital to expand its product and technology team and double down on solving employers’ biggest problems.
SmartWage was founded in May 2020 by Simon Ellis and Caroline van der Merwe. SmartWage CEO, Simon Ellis, says that no solution adequately addresses the challenge of communicating with a distributed workforce, leaving employers unable to digitally transform.
“There is a communication gap. Frontline employees don’t feel part of a company’s brand and its promise,” Simon said.
“Payslips and leave are still done manually with paper printouts, while employee communication is done using notice boards or apps, which have huge usage drop-offs. Onboarding and disciplinary procedures are still paper-based, costing businesses precious time, money and resources.”
SmartWage is giving enterprises a simple yet effective way to digitise their most time-consuming HR processes, helping them save time and money in order to focus on what matters most – people.
The product gives employees without email the ability to receive company-wide communication, access their payslips, request leave and get access to financial wellness products, all via WhatsApp.
90% of frontline employees don’t have or don’t use email, while 97% of formally employed people in South Africa use WhatsApp. In a country where most people have less than five apps on their phone, engagement is best when using an existing distribution channel like WhatsApp to reach employees.
But it’s not only about driving efficiencies for employers. SmartWage has developed a host of financial wellness products that give employees the financial lifeline they need. These include access to free financial education and on-demand pay.
“We have learnt through our process that employees need access to cash more than ever before. 80% of South Africans struggle to make it to the end of the month without relying on some form of short term debt, and the payday loan industry is booming,” said Ellis.
“If we can save employers time and money through digitisation, we can bridge the gap between South African enterprises and their frontline employees, helping enterprises connect clearly and dynamically with their employees, whilst offering financial wellness tools at the same time.
“By offering tools that benefit both employers and employees, we have a powerful value proposition.”
SmartWage clients include companies that employ frontline employees, typically in retail, quick service restaurants (QSR), manufacturing, construction, and hospitality.
They have grown their monthly active user base 14x in the past 12 months, and now work with brands such as Edgars, KFC, Debonairs, Seattle Coffee, Truda and Twizza.
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