Africa’s appetite for cloud computing software continues to increase as connectivity and bandwidth opportunities push boundaries. Per reports, the continent’s cloud computing industry coupled with the Middle East is expected to grow to $31.4 billion in 2016 from $14.2 billion last year.
SeamlessHR, a Nigeria-based company that wants to help African businesses “leverage the continent’s greatest asset: abundant human capital” with its cloud-based human resources (HR) and payroll software, has raised $10 million in Series A funding for its next phase of growth and regional expansion.
Pan-African venture capital firm TLcom Capital led the round. New investor Capria Ventures and existing investors Lateral Frontier Ventures, Enza Capital and Ingressive Capital participated.
The company’s eponymous product is a cloud-based, end-to-end HR software that helps businesses manage and streamline their entire human resource processes and workflow.
Its product suite includes an HR management system, performance and competency management, HR analytics, leave management, payroll management and recruitment management.
CEO Emmanuel Okeleji and CTO Deji Lana didn’t build SeamlessHR from the get-go. It was four years after several iterations of Insidify, an aggregator site for job seekers and a review site for companies that they started SeamlessHR in 2018.
“The natural client for our job sites was the HR,” CEO Okeleji told TechCrunch on a call. “So we thought, ‘how can we help HR to become more productive and successful so that they can run a better, more profitable company and hire more people in the process?’”
The founder also said one of the reasons for the pivot from Insidify to SeamlessHR was because the latter wasn’t profitable and lacked the flexibility to scale across Africa.
With SeamlessHR, both goals could be accomplished and a year after launching SeamlessHR’s MVP, revenues picked up and was 10 times more than Insidify’s.
Initially, the company signed a couple of smaller companies to build its reputation. But over time, it began to focus on bigger clients and signed up a bank as its first main enterprise customer. The company said that its enterprise-grade solution caters to various companies. They range from businesses with 100 employees or fewer to large enterprises with more than 10,000 employees; and from multinationals and banks such as PwC, AXA and Sterling Bank to startups and investment firms like Flutterwave and TGI Group.
Over 100,000 employees from these organizations use SeamlessHR monthly. “We have the largest aggregation of medium-to-very large companies in Africa,” Okeleji remarked.
Four years in, SeamlessHR is now rich with human resources and payroll data after handling salaries for several hundreds of companies. Sitting on top of such data provides leverage to build out more vertical products; for this reason, SeamlessHR will venture into launching embedded finance products for employees.
Here’s how it will work: Say a company is using SeamlessHR for its 5,000 employees; any one of them can tap into the platform’s earned wage access where they can get their salaries up until the point they’ve worked. It’s a typical salary structure in markets such as the U.S. but rarely used in markets like Nigeria.
“In Africa, the innovation that allows people to access credit from their jobs doesn’t happen. And an HR payroll software is well-positioned to lead that innovation because we use finance, technology and HR to help people convert their employment into collateral to access safe credit,” stated the CEO, who believes the company’s cash advances will appeal more to employees than “predatory” loans offered by some lending companies.
Africa’s payroll and HR management market has witnessed the emergence of newer companies such as YC-backed Workpay and Bento. They help businesses with salary disbursement, taxes and pension, carving out a niche for themselves in a market that appears to be dominated by SeamlessHR.
Building an HR solution in Africa requires more workaround than in developed markets, where most small businesses can afford to pay for software. The opportunity in Africa primarily lies with large corporates, not SMEs. They have higher purchasing power and a greater need for HR solutions; they make up the bulk of SeamlessHR’s customers.
SeamlessHR has also eaten into the market share of legacy and “on-premise” systems like SAP and Oracle, commonly used by large companies locally. Companies now know they can do without hiring employees who need certifications to manage software and concentrate on setting and onboarding cloud-based software solutions capable of serving their needs, albeit cheaper. Localization of software also plays a part in SeamlessHR replacing these legacy systems in Nigeria.
TLcom Capital partner Andreata Muforo said of the investment, “The strong execution shown by Emmanuel and his team is a vital ingredient required to build a successful business and as they expand their products to include embedded finance and launch their solutions to new markets, we’re proud to partner alongside them and strengthen their push to unlock more value within Africa’s B2B space.”
The company says its new funding will further strengthen its position as “Africa’s leading cloud HR and payroll platform.” Okeleji, who had a brief stint as an investment banker and practised as a doctor, said on the call that SeamlessHR would take its business to eastern and southern Africa with Kenya and South Africa as operating hubs, thus hiring more staff. The company currently has a presence in Nigeria and Ghana.
Product-wise, SeamlessHR plans to build out its embedded finance offerings and provide additional functionalities, especially around artificial intelligence, data analytics and machine learning.
Okeleji mentioned that SeamlessHR would move beyond human resources and payroll at some point into other departments that make organizations tick. He also hinted at the possibility of SeamlessHR scaling beyond Africa into other global markets, referencing the recent strides made by India’s Freshworks.
“We are building software solutions to optimize HR now, but in the future, we’ll go to other areas beyond HR. And we are positioned to build a global SaaS company because SaaS products can travel the world faster than, say, fintech. We’re beating global players in our local market and while we are not distracting ourselves now, we know we can play this game globally.”