Payday has raised a $3 million seed round led by Moniepoint Inc. Other investors in the round include Techstars, Ingressive Capital, HoaQ, and DFS Lab. MFS Africa CEO, Dare Okoudjou and Norebase CEO, Tola Onayemi also participated in the round.
Founded in 2021, Payday provides options for its customers to send and receive money in more than 20 currencies. Its cross-border payment feature is perhaps its most popular feature, enabling Africans to receive payments from outside the continent through USD, GBP, and EUR-denominated accounts. It also issues virtual dollar cards, which users use for global payments, a handy feature for many Nigerians who struggle with obtaining foreign exchange for payments.
In January 2023, Starlink launched in Nigeria, with Payday one of the biggest beneficiaries of that event. By providing Nigerians with a payment option, it was able to ride the wave of Starlink's entry to position itself as a leading provider of cross-border payment services in Nigeria.
While Starlink's appeal seems to have waned, Payday's has only gotten stronger, and the startup, which claims to have processed more than $1 million in Starlink payments, now has more than 300,000 users. Just three months ago, it had a little over 100,000 users. It also processes more than $25 million monthly across 40,000 transactions.
When it raised its pre-seed round in 2021, it said it wanted to build the Paypal for Africa, but that vision has been modified.
"We are building TransferWise for Africa; we want our customers to move money faster with the bank accounts and cards we issue. Other platforms focus on Africans in the diaspora; we’re focusing on people in Africa while planning to focus on those abroad by expanding to the U.K," CEO, Favour Ori, said in an interview with TechCrunch.
Speaking of other platforms focusing on Africans in the diaspora, in 2021, Chipper Cash, one of its competitors, launched in the United States to help Africans living in the country send money back home.
Tosin Eniolorunda, Moniepoint's CEO, spoke of his excitement at Payday's exploits but also hinted at a possible partnership between the two companies.
"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 said.
With more money in the bank, Payday is setting its sights on new horizons. First, it would target licences in the United Kingdom and Canada in addition to hiring more talent to support its growth. But it could also be dipping into the lending space soon. "We’re supporting the future of work by targeting remote workers and freelancers, and we want to be able to study customer and spend behaviours and use that to offer loans," Ori says.