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SmartWage gets funding boost to connect SA enterprises with front-line employees

SMERTWAGE gives employees without email the ability to receive company-wide communication, access their payslips, request leave and get access to financial wellness products, all via WhatsApp.

SMERTWAGE gives employees without email the ability to receive company-wide communication, access their payslips, request leave and get access to financial wellness products, all via WhatsApp.

Published Apr 7, 2022

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INNOVATIVE Human Resource and communications technology start-up SmartWage, has raised $2 million (R29m) to bridge the gap between South African enterprises and their front-line employees.

The start-up provides enterprises a simple yet effective way to digitise their most time-consuming HR processes, helping them save time and money in order to focus on people. The product gives employees without email the ability to receive company-wide communication, access their payslips, request leave and get access to financial wellness products, all via WhatsApp.

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Clients of SmartWage, founded in May 2020 by Simon Ellis and Caroline van der Merwe, include companies that employ front-line employees, typically in retail, quick service restaurants, manufacturing, construction and hospitality. The start-up has grown their monthly active user base 14 times in the past 12 months and now works with brands such as Edgars, KFC, Debonairs, Seattle Coffee, Truda and Twizza.

SmartWage chief executive Simon Ellis said that no solution adequately addressed the challenge of communicating with a distributed workforce, leaving employers unable to digitally transform.

“There is a communication gap. Front-line employees don’t feel part of a company’s brand and its promise. 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. On-boarding and disciplinary procedures are still paper-based, costing businesses precious time, money and resources,” Ellis said.

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The oversubscribed seed funding round was raised to support SmartWage’s vision of transforming Africa’s workforce through digital inclusion, particularly for front-line employees like cashiers, restaurant staff, security personnel and health-care workers.

SmartWage said it planned to deploy the capital to expand its product and technology team and double down on solving employers’ biggest problems.

Some 90 percent of front-line employees were said to lack or not use email, while 97 percent of formally employed people in South Africa used WhatsApp.

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The firm said in South Africa many people had less than five apps on their phone and engagement was said to be best when using an existing distribution channel like WhatsApp to reach employees.

SmartWage has also developed a host of financial wellness products that gives employees a financial lifeline such as access to free financial education and on-demand pay.

Ellis said they have learnt through their process that employees needed access to cash more than ever before. Some 80 percent of South Africans struggled to make it to the end of the month without relying on some form of short term debt, and the pay-day loan industry was booming.

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Ellis said by saving employers time and money through digitisation, the gap between South African enterprises and their front-line employees could be bridged, helping enterprises connect clearly and dynamically with their employees, while offering financial wellness tools at the same time.

“By offering tools that benefit both employers and employees, we have a powerful value proposition.”

Van der Merwe said what was seen day in and day out was that most large companies that employed front-line employees had not found a viable way to digitally engage and communicate with their employees, which also meant that HR was still largely paper-based and cumbersome.

The seed-funding was accessed via several influential investors. One of those investors is Idris Bello, a founding partner of LoftyInc Capital, a pan-African venture capital fund headquartered in Nigeria. Bello is an early investor in Flutterwave and Andela, two of Africa’s tech unicorns.

Bello said he was excited by the scalability of the SmartWage product set and the impact it could have, in both 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,” Bello said.

Other investors included Creator Collective Capital, Penrose Capital, along with angels from Naspers, Dimension Data, Investec and Standard Bank.

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