Payday, a Kigali-based fintech banking startup issuing accounts in dollars, euros and pounds, has raised $3 million (more than Rwf3 billion) in seed funding, which the platform intends to use to fuel its "future of work” initiative through borderless payments in Africa.

The oversubscribed seed round was led by Moniepoint Inc, an American entity that houses Moniepoint Microfinance Bank and TeamApt Nigeria.

ALSO READ: Payday launches payment service for Starlink internet users in Rwanda

Other investors included Techstars, HoaQ, DFS Lab’s Stellar Africa Fund, Ingressive Capital Fund II and angel investors such as MFS Africa chief Dare Okoudjou and Norebase CEO Tola Onayemi. Existing investors like Techstars and Angels Touch followed on.

Payday, the neobank with operations in 11 countries, including Rwanda and Nigeria where its users can pay for Starlink internet, has now reached a 370,000 user base.

When Favour Ori launched Payday in June 2021, the initial play was to build PayPal for Africa, for which it secured a million dollars in pre-seed funding. Customers in the African countries, like Rwanda where it first established its headquarters due to its business-friendly environment, had access to the platform and could send money to each other.

Subsequently, the fintech, which became the first Rwandan company to join Techstars (Toronto program), learned that enabling cross-border payments was expensive despite raising a $1.2 million pre-seed extension.

As such, it shut down nine corridors and focused on Nigeria, where it has since witnessed tremendous transaction volume and user growth.

With Payday, African remote workers and freelancers, particularly in Nigeria and Rwanda, can send and receive money in USD, GBP, EUR and 20 other currencies. This also supports remittances into Africa from other continents.

Payday also offers virtual dollar and naira cards, currency swaps, payment links, local bill payments and peer-to-peer transfers.

These features are commonly provided by other VC-backed B2C fintech apps serving African customers and those in the diaspora, such as Grey, Lemonade Finance, Send by Flutterwave, and Chipper Cash, making the landscape a competitive one where each attempts to outdo the other with speed and better fees or rates.

"We are building TransferWise for Africa; we want our customers to move money faster with the bank accounts and cards we issue. Other platforms focus on Africans in the diaspora; we’re focusing on people in Africa while planning to focus on those abroad by expanding to the U.K.,” Ori, Payday’s founder, told TechCrunch.

"We were the first startup to issue virtual accounts in Africa around June 2021, and we’ve done this for over 20 months, so we know what works and understand our market and users.”

Payday ramped up its social media marketing push over the last few months to increase market share, which seems to be paying off.

The fintech ended 2022 with slightly over 100,000 users, and now offers its virtual cards and other products to more than 300,000 users. Payday also processes an average of 40,000 transactions daily and over $25 million monthly, numbers that have fetched the fintech a $15 million acquisition offer by one of the continent’s unicorns, which, Ori said, was turned down.

The fintech’s burn rate has tripled as a result of extensive marketing. However, Ori claims that the company has remained profitable since August 2022 and its monthly revenues have quadrupled owing to its increasing user base.

"At Moniepoint, we’re excited about the unique things Favour and the team are doing with Payday. Personally, I connect deeply with his drive, technical depth and desire to execute. This is something that isn’t very common, and the urge to encourage that fire inspired us to want to be a part of this,” Moniepoint CEO Tosin Eniolorunda said.

"There’s also the alignment in our goal to provide financial happiness by addressing key international payment pain points with merchants and individuals. We see a potential to leverage their infrastructure to further deepen our suite of financial services for merchants as well, and we’re looking forward to all that’s to come.”

Having raised over $5 million since its inception, Payday will now look to secure operational licensing in the U.K. and Canada while building out operations in the former, where the startup has recently been incorporated.

The Kigali and Vancouver-based fintech will also intensify its marketing efforts while hiring more talent as it looks to expand from 35 to 50 employees in the coming weeks. It already made fresh additions to its founding and executive team.

Elijah Kingson joined the company as co-founder and CPO from global fintech Revolut while Yvonne Obike, the company’s current COO who had previous stints with Nigeria’s Bank of Industry, now wields a co-founder title. Sean Udeke, an ex-Goldman Sachs and Expedia product manager, works at the fintech company as its new head of products, where he will oversee new offerings such as loans and credit cards.

"We’re supporting the future of work by targeting remote workers and freelancers, and we want to be able to study customer and spend behaviors and use that to offer loans,” said Ori.

"That’s going to be the future for us. We also want to issue credit cards where if you’re a student trying to go to the U.S., you can start building your credit from your home country with Payday.”