Local technology start-up
SmartWagehas raised $2 million (R29 million) in seed funding, says the company in a statement.
Founded in 2020, SmartWageenables frontline employeesto receive company-wide communication, access their payslips, as well as request leave via WhatsApp.
SmartWage defines frontline employees as cashiers, restaurant staff, security personnel and healthcare workers.
The company points out that 90% of these types of employees don’t have or don’t use e-mail, while 97% of formally employed people in South Africa use WhatsApp.
In a country where most people have less than five apps on their phone, engagement is best when using an existing distribution channel like WhatsApp to reach employees, it states.
SmartWage CEO Simon Ellis says no solution adequately addresses the challenge of communicating with a distributed workforce, leaving employers unable to digitally transform.
“There is a communication gap – frontline employees don’t feel part of a company’s brand and its promise,” notes Ellis.
“Payslips and leave are still done manually with paper printouts, while employee communication is done using notice boards or apps, which have huge usage drop-offs. Onboarding and disciplinary procedures are still paper-based, costing businesses precious time, money and resources.”
Co-founder Caroline van der Merwe comments that existing software − like that from Sage, SimplePay, Workday and Oracle − is built for those with e-mail, smartphones and computers, which makes communicating and providing necessary HR services to frontline employees a real challenge.
She explains: “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 HR is still largely paper-based and cumbersome.”
The seed funding, which was accessed via several investors, will be deployed to expand its product and technology team, reveals SmartWage.
Among the investors is Idris Bello, founding partner of LoftyInc Capital, which is a Pan-African venture capital fund headquartered in Nigeria, and an early investor in Flutterwave and Andela.
Bello expressed excitement at the scalability of the SmartWage product set and the impact it could have, in Africa and beyond the continent.
“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.”
Other investors include Creator Collective Capital and Penrose Capital, along with angels from Naspers, Dimension Data, Investec and Standard Bank.
Ellis concludes: “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.”
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