Payday, a Nigerian neo-bank that enables Africans to access global accounts denominated in EUR, USD, and GBP, has announced that it has raised $3 million in a seed funding round led by Moniepoint. The funding round was initially to raise $1.5 million which it has exceeded.
Other investors involved in the funding round include Recharge, HoaQ, DFS Lab’s Stellar Africa Fund, Ingressive Capital Fund II, MFS Africa chief; Dare Okoudjoi, Norebase CEO Told Onayemi, and existing investors; Techstar and Angel Touch. Thus, with this funding, Payday has raised $5 million since its inception two years ago.
Payday permits customers or their users to transact in over 20 currencies. The platform is important, especially for remote workers and freelancers who require foreign currency transactions. Currently, the app is only available to customers in Rwanda and Nigeria. Aside from these mentioned services, Payday also offers virtual dollar and Naira cards for Nigerian users, enhancing purchases on international platforms, currency swaps, payment links, local bill payments, and peer-to-peer transfers.
The company has increased its social media marketing strategy in the last few months and claims it has tripled its user count to over 300,000 since last year but still the firm faces competition from other FinTech apps such as Grey, Lemonade Finance, Send by Flutterwave, and Chipper Cash.
Payday has acknowledged that its marketing spending is taking a toll on its revenue, but the founder, Favour Ori, insists that the company is profitable. Ori reports that the company has continued to yield benefits since August 2022 through fees charged during transactions and that these fees have quadrupled with its growing user base.
Recently, Payday became an official payment partner to Space X’s Starlin, enabling users in Nigeria and Rwanda to purchase Starlink routers. Also, the firm claimed it has raised close to $1 million already for Starlink with Ori, stating that with the gains the startup has received, it turned down a $15 million acquisition offer by an African Unicorn.
Payday hopes to expand and broaden its service connectivity within and outside the African Fintech market. They intend to use the funds raised to ramp up their marketing efforts, secure operational licensing in both the UK and Canada, and increase their staff.
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