The gig economy is growing fast in Africa. All that growth has not changed the status of workers who are seen as contractors rather than employees.
Being a contractor is disadvantageous because many of them lack access to financial services. Some gig platforms have tried to integrate financial services into their systems, but they are limited.
According to the Mastercard Foundation, the number of gig workers is expected to reach over 80 million by the year 2030. ImaliPay is an example.
The company, which describes itself as a one-stop shop financial services platform, has closed a $3 million seed in debt and equity round. The pre-seed round was raised in 2020.
It was launched in late 2020 by Tatenda Furusa and Oluwasanmi Akinmusire after Furusa noticed the challenges ride-hailing drivers faced when accessing working capital or emergencies like running out of fuel.
Furusa said on the call that there were a couple of things connected to this point. He said that it triggered him to think about what other pains these gig workers might be experiencing.
The gig economy was neglected by some financial services. We saw that we were perfectly placed to solve the problems of Africa's gig economy workers and self-employed digital workers.
Furusa's encounter: a buy now, pay later (BNPL) fuel product, but for two-wheeler gig platforms, was the basis for ImaliPay's pilot.
The startup created a partner network that gave it access to new users while others supported it.
We built out other services around spare parts, smartphones, power banks, savings and investments, and insurance.
The gig platforms are mostly responsible for the latter. It has 15 partners in this category, including Bolt, SWVL, Amitruck, Safeboda, Gokada and Max.ng.
Vendors that deal with fuel, spare parts, mobile phones and other items gig workers need to operate make up the latter. ImaliPay has partnerships with different gig platforms to provide additional financial services such as insurance and savings in South Africa.
They are about 35 and some of them include Lami, Cowrywise, Total Energies, HiFi Corporation and Britam. It offers these financial services to gig workers in this network by connecting its APIs to partner companies or directly via an independent app.
In 15 months, the userbase has grown by 60x. These gig workers, who the company said are in the tens of thousands, are able to access its services across 4,500 vendor points. Over 200,000 transactions have been made on the platform. Transaction and referral fees make up the majority of the pan-African embedded finance provider's revenues.
Furusa and Akinmusire met while working at Cellulant. They received funding from the Black Founders Fund before closing the seed round.
The round received follow-on investors from a number of VCs. Keisuke Honda of KSK Angels is an angel investor from Serbia.
The investment will be used to expand the team and explore new markets like Egypt and Ghana.
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