Local fintech, Power Financial Wellness (Power) has raised Sh377.3 million ($3 million) seed funding round to support the firm's growth in the country, Zambia and other African States.
The seed funding round was led by DOB Equity alongside Bolt by QED Investors, Quona Capital, Zephyr Acorn, and Norrsken Accelerator.
Power, founded by Brian Dempsey and Chandra Singh in 2020, allows workers to take control of their financial health by making a holistic set of financial services available to employees and gig workers across Sub-Saharan Africa.
The company helps individuals to access earned wages, streamline savings and investments to regulated partners, qualify for longer-term credit, and enrol in affordable insurance.
This is aimed at enabling workers to live with dignity, reduce financial-related stress, and take control of their financial well-being.
Power's solution includes a mobile app for employees and workers, a workforce deduction management system for employers, and a digital core banking engine connecting to regulated financial service providers. Through the app, workers are digitally onboarded and verified and then have immediate access to the Power services.
While financial inclusion has improved in Africa, financial health (the ability to manage day-to-day needs, cope with shocks, and invest in future goals) has deteriorated in this same period. According to Financial Sector Deepening Kenya (FSD Kenya), only 17 per cent of Kenyans were financially healthy in 2021, compared with 39 per cent in 2016.
"There is an urgent need to develop a more holistic set of financial solutions that improve financial health and well-being, for both formal workers and the growing gig economy," says Brian Dempsey, Power co-founder and chief executive. This seed round investment will accelerate power's growth in Kenya and Zambia and deepen its presence in other countries in East, West, and Southern Africa.
Anne Njuki an investment professional at DOB Equity said that deterioration in financial health, and the increased prevalence of predatory financial instruments, present an opportunity for transparent, holistic and beneficial financial solutions.
Partner and Head of Africa at QED Investors Gbenga Ajayi noted that there is a massive and untapped opportunity to provide niche and relevant financial services to a demographic of the population often overlooked or underserved by existing providers.