BrandArena: Nigerian neobank, Payday Secures $3 million Seed Funding for Expansion

Thursday 30 March 2023

Nigerian neobank, Payday Secures $3 million Seed Funding for Expansion

Payday, a Nigerian neobank, has announced a $3 million fundraising round led by Moniepoint Inc. HoaQ, DFS Lab's Stellar Africa Fund, and angel investors such as MFS Africa CEO Dare Okoudjou and Norebase CEO Tola Onayemi also participated in the investment round. Previous investors such as Techstars, Angels Touch, Ingressive Capital, and Now Venture Partners participated in this round as well.

Payday, founded in June 2021 by CEO and creator Favour Ori, enables Africans to transfer and receive money from anyone (friends, family, employers, clients, etc.) anywhere in the world.

With this new funds, total investments raised to date is $5.1 million, including the $1 million pre-seed funding raised in 2021. The startup intends to get an operational licensing in the U.K. and Canada while building out operations in Canada, where the startup has recently been incorporated.

Payday also intends to increase its marketing efforts as well as grow its workforce from 35 to 50 employees. It has however added three new people to its founding and executive team – Elijah Kingson, now co-founder and CPO joining from global fintech Revolut; Yvonne Obike, current COO and also now co-founder. Sean Udeke has now joined the company as new head of Products, coming from Goldman Sachs and Expedia.

Favour also says that the new raise will fuel its “future of work” initiative. According to him, “we’re supporting the future of work by targeting remote workers and freelancers, and we want to be able to study customer and spend behaviors and use that to offer loans.”

Payday enables African freelancers and remote workers, specifically those in Nigeria and Rwanda, to send and receive money in over 20 currencies, including USD, GBP, and EUR. This provides them and their counterparts in the diaspora who work remotely for global companies with the ability to receive payments and withdraw funds in their preferred currency. Payday additionally provides virtual cards in USD and Naira, which enable Nigerian users to make purchases on foreign platforms, along with currency swaps, payment links, local bill payments, and peer-to-peer transfers.

“That’s going to be the future for us. We also want to issue credit cards where if you’re a student trying to go to the U.S., you can start building your credit from Nigeria with Payday,” he added.

Favour claims the Kigali and Vancouver-based fintech currently offers its virtual cards and other products to more than 300,000 users. He also said that the startup processes an average of 40,000 transactions daily and over $25 million monthly.

On the raise, Moniepoint CEO Tosin Eniolorunda said, “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. This is something that isn’t very common, and the urge to encourage that fire inspired us to want to be a part of this.”

“There’s also the alignment in our goal to provide financial happiness by addressing key international payment pain points with merchants and individuals. We see a potential to leverage their infrastructure to further deepen our suite of financial services for merchants as well, and we’re looking forward to all that’s to come,” he added.

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