South African Fintech Startup, Floatpays Closes $4m Seed Funding Round

Floatpays, a South African on-demand pay provider, has secured a $4 million seed funding round. The investors in the round include Global Founders Capital, Base Capital, Finca Ventures, Raba Partnership and 4DX Ventures, as well as angels Alan Rutledge, Shaun Hurwitz, Youcef Oudjidane and Olugbenga Agboola, the co-founder and CEO of Flutterwave.

The new investors join existing backers Founders Factory Africa, Kepple Africa Ventures, Norrsken Foundation and MFS Investments.

Founded in 2019 by Simon Ward, FloatPays provides payroll integration, employee access, financial education, effective reporting, payment, and training services. Through access, budgeting, and training, the company is enabling its team to achieve financial well-being and moving them from debt to savings.

In July 2021, Floatpays joined accelerator programmes, Y Combinator – an initiative known for having backed a number of startups that would later become multi-billion-dollar companies. These include Airbnb, Stripe, Dropbox, DoorDash and Instacart. Floatpays is reported to be the only South African startup in the Y Combinator summer class and is one of only a handful South African startups to be accepted into the program in its history.

Since launch, despite the setback of Covid-19, Floatpays has achieved 43% growth of their employer base and 70% user growth. The funding is a crucial foundation for the next phase of Floatpay’s growth, and was collectively backed by industry leaders in the fintech investment space, among which are the likes of Global Founders Capital, Base Capital, Finca Ventures, Raba Partnership and 4DX Ventures.

“The investment allows us to consolidate our position in South Africa and expand into the rest of Africa. We are accelerating the development of important features that complement our existing product, such as our new interest-bearing savings account that is directly linked to employees’ paychecks”, says Simon Ward, founder of Floatpays.

According to Ward, Floatpays was established as a “small company with big dreams to create a financially inclusive Africa.” As he explains: “I launched Floatpays as a social impact-driven business on a mission to help move employees out of bad debt cycles and into savings and long term financial wellness. Our mission is to educate employees on better personal finance management, support them with financial planning and saving, and give them an alternative to payday lenders/high-interest credit solutions when mid-pay cycle liquidity becomes a problem.”

“We are witnessing the potential technology has in offering fair and transparent financial services products. Floatpays is a leader in the earned wage space and on its way to building the leading trusted brand across the continent. We are excited to partner with Simon and the team in supporting Floatpay’s mission in becoming the financial services platform of choice for Africa’s large and growing workforce”, says George Rzepecki, founder of Raba.