Nigerian Gig economy fintech, ImaliPay, which describes itself as a one-stop-shop financial services platform, has raised a $3 million seed in debt and equity round to expand its financial services infrastructure in Kenya, Nigeria, and South Africa.
The round welcomed participation from Leonnis Investments and included Ten 13, Uncovered Fund, MyAsia VC, Jedar Capital, Logos Ventures, Plug N Play Ventures, Untapped Global, Latam Ventures, Cliff Angels, Chandaria Capital, and Changecom among the follow-on investors. Keisuke Honda of KSK Angels and other angel investors from Serbia, Kenya, and Norway also participated in the round.
Last year, the fintech raised an $800,000 pre-seed round and launched in South Africa in December, initially being active in Nigeria and Kenya. The fintech is looking to explore new markets like Ghana and Egypt with new funding.
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Founding ImaliPay To Ease The Pains of GiG Workers
Co-founded in 2020 by Tatenda Furusa and Sanmi Akinmusire, ImaliPay allows new and existing gig workers or freelancers to save their earnings and get in-kind loans through a purchase now, pay later model related to their trade.
ImaliPay was launched after Furusa noticed the challenges ride-hailing drivers faced when accessing working capital or emergencies like running out of fuel in Nairobi.
“One time, a Bolt driver ran out of fuel in Nairobi when I was coming from the airport and couldn’t top off immediately. It triggered me to think of what other pains these gig workers might be experiencing,” says Furusa.
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“We researched the gig economy and found that they were neglected by some financial services. And we saw that we were perfectly placed on building a fintech solving the problems of Africa’s gig economy workers, freelancers, and self-employed digital workers.”
Furusa’s experience inspired ImaliPay’s pilot: a buy now, pay later (BNPL) fuel product for two-wheeler gig platforms, with the startup partnering with a few fuel stations in Ibadan, Nigeria, to provide this service to SafeBoda riders.
Impacting Gig Economy in Africa
Africa is experiencing rapid growth in the gig economy. Despite this growth, workers who are considered contractors rather than employees have remained unchanged.
Being a contractor is unfavourable for many of them, particularly in the two-wheeler industry, because they lack access to some financial services. Some gig platforms have attempted to incorporate financial services onto their platforms; however, their capabilities are limited.
Meanwhile, fintech like ImaliPay provides a broader spectrum of financial services for these gig workers (who, according to the Mastercard Foundation, are expected to reach over 80 million by 2030).
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The startup then proceeded to build a partner ecosystem so that some give it access to new users while others support its ecosystem and marketplace.
“We built out other services around spare parts, smartphones, power banks, savings and investments, and insurance bundled with those products,” said Furusa. “So like accident covers and income protection loss insurance, we intertwine these products so gig workers can qualify for each product based upon their transactional behaviour.”
The former is primarily the fault of the gig platforms. Bolt, Glovo, SWVL, Amitruck, Safeboda, Gokada, and Max.ng are among the 15 partners in this category.
Vendors who deal with fuel, spare parts, mobile phones, and other items needed by gig workers make up the difference. ImaliPay has partnered with platforms in Kenya and South Africa to provide additional financial services such as insurance (health and income protection loss) and savings, partnering with various gig platforms.
ImaliPay’s user base has increased 60X in just 15 months. These gig workers, who the company said are in the “tens of thousands,” access its services across 4,500 vendor points. The company also revealed that over 200,000 transactions had been processed on its platform. Transaction and referral fees are how the pan-African embedded financing provider makes money.
Commenting on the round revealed that — “Our seed funding will be used to hire important personnel, improve technology, and expand into other areas.”
“The impact we want to make in encouraging financial stability in the gig economy, servicing the underbanked, and taking them through a customized financial inclusion journey is firmly anchored in our passion for launching and keeping ImaliPay rising.” “Having strong partners and investors at the table demonstrates our commitment to building vital services for the future of work,” he added.
“Fuelling disruptive startups and building ecosystems is the heartbeat of our investment model at Ten13; we’re excited to follow on and be part of ImaliPay’s journey as they re-shape the future of financial services for the African gig economy,” said Stew Glynn, co-founder, and managing partner at Ten13.