Cadana, a fintech startup with a focus on emerging markets, has successfully completed a seed funding round, securing $7.1 million to enhance and expedite the process of remittances for African professionals. This financial injection is aimed at improving Cadana’s payroll services, which cater to international hiring platforms and financial institutions.
The seed funding round was spearheaded by Costanoa Ventures, with significant contributions from Better Tomorrow Ventures and 500 Startups. Since its inception in January 2021, Cadana has accumulated a total of $7.4 million in investment capital, which includes an initial $325,000 of pre-seed funding raised during the year of its establishment.
Cadana was co-founded by Albert Owusu-Asare from Ghana, who serves as the CEO, and Ameer Shujjah from Pakistan, the CTO. The duo, who are both immigrants in the United States, met during their college years where they pursued majors in computer science and physics, respectively. Their company specializes in simplifying payroll processes for a variety of clients, including talent marketplaces, staffing firms, and human resources providers. Cadana’s services enable these businesses to compensate their workforce across more than 32 emerging markets, with a particular emphasis on countries like Nigeria and Ghana.
The company’s mission is to make it more accessible for African talent and those in other emerging markets to tap into global employment opportunities.
Initially, Owusu-Asare and Shujjah launched Cadana as a platform offering Earned Wage Access (EWA) in select African markets. However, they quickly recognized a broader opportunity to address various payroll-related challenges. As a result, the EWA service was integrated into a more comprehensive suite of solutions that Cadana now offers, including global payroll software and services designed for businesses operating in emerging markets.
The burgeoning global freelancer market, valued at approximately $1.3 trillion, is propelled by over 200 million knowledge workers. This substantial workforce is creating a surge in demand for innovative solutions that can automate payroll processes and simplify the intricacies of employment and tax regulations on a worldwide scale.
Despite this demand, the unique legal challenges presented by African and other emerging markets pose significant obstacles. These markets often have distinct employment laws, which vary greatly from one country to another, rendering many of the current payroll products ineffective or entirely unsuitable.
For global hiring platforms, which typically rely on third-party providers for payroll services, these legal complexities translate into a burdensome responsibility. They find themselves having to navigate and comply with the diverse local employment laws on their own.
The situation is further complicated for remote workers in Africa, who frequently experience delays in payment, sometimes waiting up to a week to receive their earnings. Moreover, they incur substantial remittance fees, which can amount to a loss of 5-7% of their income.
Cadana addresses these issues head-on with its innovative application programming interfaces (APIs) and white-label products. These offerings enable global workforces to seamlessly incorporate payment processing and payroll management into their existing systems, thereby circumventing the problems associated with local employment laws and high remittance fees. Cadana’s solutions are designed to provide a more efficient and cost-effective payroll experience for both employers and remote workers in emerging markets.
In a conversation with TechCrunch, Albert Owusu-Asare, the CEO of Cadana, expressed that their clientele in emerging markets has shown a high level of satisfaction with the solutions Cadana has developed.
Owusu-Asare emphasized the company’s commitment to addressing the specific challenges faced in these markets. “We have concentrated our efforts on establishing a strong local infrastructure to tackle these issues. Over the last three years, we have worked on integrating local payment systems, ensuring compliance, and incorporating benefits systems to enhance our service offerings and better fulfill the requirements of our customers,” he explained.
In addition to these integrations, Cadana has introduced the capability for real-time payments, charging fees of less than $3, which is a significant reduction compared to the typical remittance fees. The company also provides workers with the opportunity to invest in assets denominated in US dollars, such as stocks, offering them a way to diversify their financial portfolios.
While Cadana operates in a competitive space with rivals like RemotePass, a UAE-based company that also targets emerging markets, CEO Owusu-Asare is confident in Cadana’s unique position. He asserts that Cadana’s distinct edge lies in its specialized knowledge and proficiency in expediting and simplifying the remittance process for professionals in Africa, Asia, and Latin America, thereby differentiating it from its competitors.
