Over the past year, Canaan’s fintech team has gone quite deep and built conviction around emerging market fintech. A big push for us has been in Africa where we’ve spent hundreds of hours with founders throughout the continent who are building new solutions across the fintech stack.
There’s more to come at a later date, but I’m incredibly pleased to today share more about our new partnership with Earnipay, our fourth portfolio company based in Africa.
Core to the fintech framework at Canaan are platforms that earn and accrue users’ trust by solving a fundamental problem and becoming habitual parts of their lives. Nowhere should trust be more delicately handled than with someone’s salary, specifically in creating peace of mind for users to know money is at their disposal whenever they need it most.
The ability for earned wage access (EWA) solutions to build trust in this way is a large reason why they have seen product-market fit in nearly every market around the globe. It’s also why EWA is a natural fit in Africa where more than 70% of the workforce (500 million people) is paid every 30 days yet live paycheck to paycheck. Research shows that EWA enables employees to avoid late fees for things like housing and loan payments, preventing employees from resorting to payday loans (which can be extremely punitive), or loss of service, all of which can perpetuate negative financial spirals. For employers, the benefits of EWA are also very clear: higher employee satisfaction, productivity, and retention (and consequently lower turnover costs).
These outcomes are all reasons why we are excited to back the team at Earnipay on their mission to deliver financial freedom for income earners across Africa.
Earnipay is building an employer-facing software that integrates into existing payroll systems popular throughout the continent and offers an employee-facing app that enables them to easily access a percentage of their daily earned salaries. (There’s no payback or interest charge because employees are accessing what they have worked for.) The app also offers educational programming to help employees to improve their financial wellness and ultimately enable them to make better financial decisions. This last part is key: Earnipay isn’t just building a flexible payroll toll, but a full suite of products that improve the financial well-being of millions, starting in Nigeria.
As Africa’s most populous and highest GDP nation, Nigeria’s formal economy constitutes 30% of workers (nearly 55M), almost all of whose wages are paid monthly. (That number is expected to balloon, as the population of Nigeria is projected to double by 2050.) It’s a market that’s ripe for an innovator like Earnipay. Starting development and beta testing only five months ago, the team has already built a product that’s seeing strong customer uptake across dozens of businesses across Nigeria.
We’re especially thrilled to partner with founder Nonso Onwuzulike, who started Earnipay after seeing the life-altering impact EWA can make for employers and employees alike. (His previous company, a recycling startup in Ghana, increased worker satisfaction and productivity, as well as worker tenure, by switching payment schedules from monthly to daily.) Nonso understands the problem from all perspectives and has also assembled one of the strongest teams we’ve ever met on the continent whose passion and expertise match his own, including his COO Busayo-Onome Oyetunji and his CTO Joshua Ajayi.
We believe the impact that Earnipay is creating in Nigeria is just the beginning. We’re proud to support the company in driving easier access to salaries, and, most importantly, actually improving financial outcomes for everyday people.