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The gig economy is experiencing profound growth in Africa. Yet, all that growth hasn’t changed the status of workers who are seen as contractors rather than employees.

Because many of them, particularly in the two-wheeler space, lack access to some financial services, being contractors is disadvantageous. Some gig platforms have tried to embed financial services into their systems, but they are limited.

Meanwhile, other fintechs are providing 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). 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 fintech raised an $800,000 pre-seed round in 2020.

It was launched in late 2020 by Tatenda Furusa and Sanmi Akinmusire after Furusa noticed the challenges ride-hailing drivers faced when accessing working capital or emergencies like running out of fuel in Nairobi.

“A couple of things connected to this point,” CEO Furusa told TC on a call when asked how the company started. “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,” he said.

“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.”

ImaliPay’s pilot was based on Furusa’s encounter: a buy now, pay later (BNPL) fuel product, but for two-wheeler gig platforms as the company partnered with a few fuel stations in Ibadan, Nigeria to offer this service to SafeBoda riders.

The startup proceeded to create a partner ecosystem structured so that some give it access to new users while others support its ecosystem and marketplace. It offers financial services to gig workers in this network via an independent app, chatbot, USSD, and connecting its APIs to partner companies.

“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 behavior.”

The gig platforms are primarily responsible for the former. It has 15 partners in this category, including Bolt, Glovo, SWVL, Amitruck, Safeboda, Gokada and Max.ng. 

But vendors that deal with fuel, spare parts, mobile phones and other items gig workers need to operate make up the latter. The same goes for platforms ImaliPay has partnered with to provide additional financial services such as insurance (health and income protection loss) and savings in Kenya and South Africa, partnering with different gig platforms.

Collectively, they are about 35 and some of them include Lami, Cowrywise, Ola Energy, Total Energies, HiFi Corporation and Britam.

In 15 months of operation, ImaliPay’s userbase has grown by 60x. These gig workers, who the company said are in the “tens of thousands,” access its services across 4,500 vendor points. Over 200,000 transactions have been carried out on ImaliPay’s platform. The pan-African embedded finance provider’s revenues come from transaction and referral fees.

COO Akinmusire and Furusa met while working at Cellulant before starting ImaliPay. They received funding from Google Black Founders Fund last October before closing this seed round, which welcomed participation from Leonnis Investments.

The round also received follow-on investors from VCs such as Ten 13, Uncovered Fund, MyAsia VC, Jedar Capital, Logos Ventures, Plug N Play Ventures, Untapped Global, Latam Ventures, Cliff Angels, Chandaria Capital and Changecom. Angel investors like Keisuke Honda of KSK Angels and others from Serbia, Kenya and Norway participated.

The investment will go into expanding its 50-man team, amping up its technology and exploring new markets like Ghana and Egypt, the founders said.