Fintech Startup Payday Raises $1 Million In Pre-seed Funding To Become Africa’s “PayPal”

Payday, a pan-African global payments startup, has raised $1 million in pre-seed funding to develop what they believe will be the “PayPal for Africa.” The startup wants to be the one-stop-shop for anyone looking to send money freely within and beyond Africa.

Several investors participated in the round including Microtraction, MAGIC Fund, Ventures Platform, Voltron Capital, Co-Creation Hub Syndicate, Helicarrier Inc, Greencap Equity, Midlothian Angel Network, Emergence Capital, Olugbenga Agboola, Charles Odita, Eke Eleanya, Adegoke Olubusi, Edmund Olotu, Prosper Otemuyiwa, Dimeji Sofowora, Perseus Mlambo, Abdul Hassan, and Onyekachukwu Somtochukwu Eyisi, as well as a host of others.

Payday was founded in May 2021 by Favour Ori, a Nigerian.  It kicked off its beta test in June 2021 and launched in July. It has since grown rapidly with over 5,000 users, with most of its users coming through referrals and word of mouth. In under three weeks of its launch, the startup successfully processed $1.4 million in transactions.

Payday’s product offerings include sending and receiving money globally, getting paid by foreign employers and clients, issuing virtual cards, and paying tuition and other fees in Canada, the United States, and the United Kingdom. Its other products include Neon Pay; online and offline payments for African small and medium businesses, and Talent Pay; a service to pay “African tech talent and creatives in minutes not weeks.”

Payday’s investors had a lot to say about the funding. Bosun Tijani, Co-founder and Chief Executive Officer of Co-Creation Hub said: “Payday’s solution is extremely timely and it backs up Africa’s agenda of a single market. Making it seamless and easy to pay people in their local currency, and through multiple checkout options it’s a strong boost for AfCFTA.”

Temi Awogboro, General Partner at MAGIC Fund said: “MAGIC is delighted to be an early backer of Favour and the Payday team in achieving their audacious vision of enabling swift borderless online payments services for Africa, thereby connecting its users with vast opportunities around the world. This aligns with our founders-backing-founders thesis and we are excited by the opportunity to support the team as they positively disrupt the space.”

Sunil Sharma, Managing Director of Techstars Toronto said: “Africa is home to some of the most talented and ambitious entrepreneurs we see in the world today, and they are solving problems for one of the biggest markets on the planet. Sending money remains complicated, time-consuming and expensive but we believe Payday Africa has the vision to liberate Africans and the global diaspora to send and receive money quickly and affordably.”

Kola Aina, a General Partner at Ventures Platform said: “We are thrilled to partner with Payday as they seek to ease the difficulty with moving money around Africa and across the world; this is even more critical as remote work opportunities continue to grow for young Africans.”

Gossy Ukanwoke, one of Payday’s advisors, said: “Payday is really breaking down walls and barriers across Africa. This is a company that I believe will have massive growth, connecting the rest of the world to Africans and opening up many channels of commerce and payments.”

With the new funding, Payday will expand into new territories, hire talents for their Engineering, Product, Compliance and Growth roles to scale its operations, and acquire additional licenses.