SmartWage raises R29 Million for its innovative HR and communication technology startup SmartWage

SmartWare is an innovative startup in HR and communications technology that has raised $2 million. This amounts to R29 million. Oversubscription Round of seed funding was raised to support SmartWage’s vision of transforming Africa’s workforce through digital inclusion, particularly for frontline employees like cashiers, restaurant staff, security personnel, and healthcare workers. 

SmartWage is giving enterprises a simple yet effective way to digitize their most time-consuming HR processes, helping them save time and money in order to focus on what matters most – people. This product allows employees to access company communications, access their payslips and request leave via WhatsApp.

90% of frontline employees don’t have or don’t use email, while 97% of formally employed people in South Africa use WhatsApp. Engaging employees is easier when you use an existing distribution channel, such as WhatsApp.

Simon Ellis, CEO of SmartWage, stated that there is no way to adequately address the problem of communicating with a distributed workforce. This leaves employers without the ability to digitally transform.

“There is a communication gap. Frontline employees don’t feel part of a company’s brand and its promise. While pay slips and leave are still manually done with paper printouts, employee communication is done via notice boards or apps which have a large usage drop-off. Onboarding and disciplinary procedures are still paper-based, costing businesses precious time, money and resources”. 

But it’s not only about driving efficiencies for employers. SmartWage offers a variety of financial wellness products to give employees the financial support they need. These include on-demand and free financial education.

“We have learnt through our process that employees need access to cash more than ever before. 80% of South Africans struggle to make it to the end of the month without relying on some form of short term debt, and the payday loan industry is booming” says Ellis.

Ellis goes on to say “If we can save employers time and money through digitisation, we can bridge the gap between South African enterprises and their frontline employees, helping enterprises connect clearly and dynamically with their employees, whilst offering financial wellness tools at the same time. By offering tools that benefit both employers and employees, we have a powerful value proposition.”

Simon Ellis and Caroline van der Merwe created SmartWage in May 2020. Van der Merwe is an expert in this field, with nearly a decade of experience managing employee benefit programs. He says that existing software such as SAGE, SimplePay and Workday was built for people with email, smartphones, and computers. This makes it difficult to communicate with frontline employees and provide the necessary HR services.

She goes on to explain “What we see day in and day out is that most large companies that employ frontline employees haven’t found a viable way to digitally engage and communicate with their employees, which also means that HR is still largely paper-based and cumbersome.”

Many influential investors were able to access the seed funding. One of those investors is Idris Bello, founding partner of LoftyInc Capital, a pan-African VC fund headquartered in Nigeria, and an early investor in Flutterwave and Andela, two of Africa’s tech unicorns. Bello expressed excitement about the SmartWage product line’s scalability and the potential impact it would have in Africa and elsewhere.

“The team at SmartWage are innovators – they’re building more than just an earned wage access product, and have recognised that in order to make a tangible impact on employers, they need to build a powerful way for employers to engage with their workforce. We are excited to partner with Simon, Caroline and the powerful team they’ve assembled to support SmartWage’s mission to drive digital inclusion across Africa”. 

Creator Collective Capital and Penrose Capital are other investors, as well as angels from Investec Dimension Data, Standard Bank, Standard Bank, and Naspers. SmartWage plans to deploy the capital to expand its product and technology team and double down on solving employers’ biggest problems.

SmartWage clients are those companies that employ frontline workers, usually in retail, fast-service restaurants (QSR), construction, and hospitality. Their monthly active user base has grown 14x over the past twelve months. They now work with brands such a KFC, Debonairs and Seattle Coffee, Truda, Twizza and Truda.

 

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