Although many areas of African economies have embraced a move to digital, the internal systems that companies and large organisations use for accounting and payments largely remain offline.
This presents a huge opportunity for startups that can build HR software to cut costs for companies and increase productivity and satisfaction for employees.
Although global brands like Oracle and SAP are used in Africa, the homegrown HR sector is growing fast with several large companies making big gains. Ghana-based Oze, Kenyan startup WorkPay and South Africa’s FloatPays are all examples of companies that have raised millions of dollars in the past year to expand HR software across Africa.
The largest raise in the sector to date came from SeamlessHR, a Nigeria-based software company that raised $10m in a Series A round at the start of the year. Founded in 2018, the startup will use the capital to build more products and roll out services in other markets like Kenya and South Africa.
“We serve the middle market and large enterprises by African standards,” says CEO Emmanuel Okeleji. “That means we have companies from between 10 employees to 20,000 employees and above.”
One of the most popular services, he says, is the performance management tools available on the platform which allow employers to track their employees across several different metrics. Easy onboarding tools for hiring employees is another key service that attracts customers.
The company is also looking to embed financial services on top of its core platform to build out new revenue streams.
“On the surface it will be payday loans,” he says. “At the moment we have API integrations to pay salaries. Once you calculate salaries, you can debit accounts and create credit. But it’s deeper than that. It’s about creating different products that will make life better for people working on the continent.”
Targeting developed markets
After building in Africa for several years, the CEO wants to expand the software-as-a-service (SaaS) platform to more developed markets like Europe and the US. He says there is no reason why African software cannot compete with global equivalents – and even go one step further.
The entrepreneur gives the example of Japanese cars that shook up the US market in the 1970s after local manufacturers had enjoyed decades of dominance.
“We’re going to provide a lot of innovation,” he says. “We are cobbling things together in different ways. It’s an evolutionary advantage that we have – we are building things in a deeper way. Africa will come to the global market with products that are more robust, more durable.”
While he says the market is not yet mature enough to “invent” totally new types of products, he says that it will excel at innovating in already established fields.
“You have American companies that just focus on performance management. And they have the luxury to do that, because they can become a billion-dollar company just by doing that. I cannot become a billion-dollar company if I was doing that alone. By the nature of my market I have to do more than that.”
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This interview originally appeared in Tech54, the African Business newsletter that takes an incisive look at the continent’s tech scene. Subscribe to the newsletter here.