WorkPay, a Kenyan digital human resource management and payroll solution provider startup, has raised $2.1 million in seed funding to accelerate its development.

WorkPay was founded in 2017 by Paul Kimani with the name TozzaPlus, but was rebranded in 2019 through a $100,000 funding round provided by YCombinator, P1 Ventures, Soma capital, Musha Ventures and Kepple Africa which oversaw the funding. The investors are adding $2.1 million to the purse of WorkPay to accelerate its growth.

Having participated in a recent three-month YCombinator W20 accelerator programme in Silicon Valley, where it raised $150,000 at the end of the programme, WorkPay is focusing its services on human resource management solutions via enterprise resource planning (ERP).

Each month, it processes transactions worth millions of shillings for small and medium sized businesses. Through an intuitive easy to use solution, WorkPay offers employee management with Time Tracking, Human Resource Management, and payroll processing with bulk salary payments to employees’ bank accounts or mobile wallets.

The co-founder and CEO of WorkPay, Paul Kimani said the fund will be used to expand its services in East Africa.

“This new investment will give us the opportunity to scale our human resource management and payroll processing tools to SMBs and expand to enterprise clients across East Africa. We are fortunate to have the backing of some incredible people on our mission to make it easy for businesses to manage and pay employees across Africa,” he said.

WorkPay currently processes payrolls for over 25,000 employees, covering more than 300 SMEs in Kenya.

Ryosuke Yamawaki, general partner of Kepple Africa Ventures said WorkPlay gave them a positive impression in their first meeting on a pitch day in September 2018, which made them stand out from others.

“They’re different in the way they define their key customers, understand their real pains, and design specific solutions. It is no surprise that they have come this far. They will surely become one of the most successful startups in the continent and drastically change the way the workforce is managed,” he said.

WorkPay operates a cloud-based system which allows small and medium-scale enterprises to integrate their payment systems and manage their payroll functions.

The company’s cloud of digital data is stored and processed on a network of remote servers hosted on the internet rather than on local servers or personal computers, according to Technext. It therefore makes payment transactions flexible, allowing enrollees to access its platform at their convenience no matter where they are.

As part of its services, the platform offers a calculation tool for businesses to estimate hourly, weekly, monthly and other forms of wage payments, to help workers monitor their salaries.

The African fintech ecosystem has continued to defy the odds of a coronavirus pandemic to secure funding for startups, and Kenya is ahead of many other African countries, including Nigeria, in spurring the growth of its tech industry.

While most of the startup funding has come from foreign investors, the Kenyan government has moved to save the country’s tech industry from being totally dominated by foreign investors.

The National Information Communications and Technology Policy Guidelines 2020, encourages Kenyans to invest in startups while stipulating 30 percent Kenyan ownership as a criteria for ICT services Licenses in Kenya.

“It is the policy that only companies with at least 30 percent substantive Kenyan ownership, either corporate or individual, will be licensed to provide ICT services,” the regulatory policy published by the ICT ministry said.

Kenya ranks second, behind South Africa in the African startup ecosystem, and the government has designed a developmental frame with the new policy, which proposes a government venture capital fund that will invest in startups for a portion of the equity on a first-loss basis in case the startup fails.

However, while the policy is anticipated to create 20 Kenyan multinational ICT companies, 300 mid-sized firms, 5,000 SMEs and 20,000 startups, low participation by Kenyans will likely hinder the growth as most of the investors in African startups have been foreigners.