Technology

Cadana, an emerging markets payroll services provider for global hiring platforms, banks $7.1M seed

Cadana An Emerging Markets Payroll Services Provider For Global Hiring Platforms Banks 7 1m Seed

Solar Kat Latest Tech

The global freelancer market, a $1.3 trillion industry fueled by over 200 million knowledge workers, drives demand for solutions that automate payroll and streamline employment and tax regulations worldwide. However, most existing products fail to address the legal landscape of emerging markets, such as differences in employment laws. 

This oversight means global hiring platforms, which traditionally rely on third-party payroll providers, are typically left to navigate the complexities of local employment laws themselves — creating a subpar experience for workers. Additionally, remote workers in these markets have problems of their own as they often have to wait up to a week to get their wages and lose 5-7% in remittance fees. Tackling these pain points is where Cadana comes in: Launched in 2021, its APIs and white-label products allow global workforces to integrate payments and payroll management into their existing systems. 

Cadana streamlines payroll for major talent marketplaces, staffing companies, and HR providers, enabling them to pay workers in over 32 emerging markets, including Brazil, Ghana, Nigeria, Pakistan and the UAE, making it easier for workers in these regions to access global job opportunities.

The company told TechCrunch it has raised a total of $7.4 million in funding since it was founded back in January 2021. This includes $325k in pre-seed funding that same year and a $7.1M seed round, which closed this year. Costanoa Ventures led its most recent round, with Better Tomorrow Ventures and 500 Startups participating. 

“Our customers in emerging markets appreciate what we’ve built. When we started, workers often waited about seven days to receive their payments and lost remittance fees too, which is a significant burden given that many support an average of five family members,” co-founder and CEO, Albert Owusu-Asare, told TechCrunch in an interview. “We focused on creating a robust local infrastructure to address these issues. Over the past three years, we’ve integrated local payments, compliance, and benefits systems to serve our customers better and meet their needs.” 

The fintech’s primary customer base spans the U.S., and the U.K., where it serves remote work businesses that employ thousands, even tens of thousands of workers. Many had previously struggled with ineffective vendors or internal solution attempts, per Owusu-Asare, who explained that Cadana provides a spectrum of solutions tailored to the different problems these businesses face. 

At the lower tier is its white-label solution, in which businesses can add a logo and go live. The middle tier is for those who want to build custom components, such as UI elements, with Cadana’s support. Then, at the highest tier — aimed at clients who need specific solutions but lack the necessary infrastructure — Cadana provides APIs that cover payments, compliance, understanding local labor laws, and fraud control, allowing its clients to create custom tools.

Owusu-Asare and Cadana’s other co-founder, Ameer Shujjah, who is also its CTO, are both immigrants to the U.S. who met while in college as computer science and physics majors. After years of experience working at Amazon, Esusu and Goldman Sachs, they founded Cadana — initially as an earned wage access (EWA) platform in specific African markets. But, post-launch, salary-on-demand quickly took a backseat — becoming a feature for a broader play of providing global payroll software and services to businesses in emerging markets as the pair spied a more sizeable opportunity to chase out a range of payroll frictions. 

“I’m from Ghana, and Ameer is from Pakistan. We intimately understand what these workers need and their pain points and our focus is on providing workers in these regions with the best pay experience possible,” added Owusu-Asare. 

Some of Cadana’s other features include real-time payments with fees under $3; and options for workers to invest in USD-denominated assets like stocks.

Cadana has a few competitors, including UAE-based RemotePass, which also focuses on emerging markets. However, U.S. payroll giants, including Deel and Remote, are looking at these markets to turbocharge their own growth — so competition looks set to keep heating up. 

However, Owusu-Asare argues Cadana’s differentiating edge is its expertise in streamlining and accelerating remittance for talent in emerging markets, particularly Africa, Asia and Latin America. During our interview, he points to multiple flexible payment options (“eight+”) which are available for workers to withdraw funds, including mobile money, bank accounts, and cards. He also highlights the importance of the startup’s team of legal experts, who he says have “deep knowledge” of local labor laws across various regions.

On the other hand, the chief executive told us he views global HR platforms, such as Deel and Rippling, as prospective customers rather than competitors due to Cadana’s positioning as a provider of payroll APIs and white-label solutions.  

Commenting in a supporting statement, Amy Cheetham, partner at Costanoa Ventures, said: “While the U.S. has seen a surge in tech platforms aiming to streamline payroll and benefits, the vast majority fall far short of addressing the unique challenges faced by employees and employers in emerging markets.

“Albert and Ameer have built exactly that, a purpose-built suite of white label products and APIs for emerging markets to power the next generation pay experience for millions of workers.”

Cadana claims to have processed more than $150M in transactions for its clients to date. It also reports that customers have grown 3x in the last year (it didn’t disclose any of its clientele.). The three-year-old company also told us that its revenue, which is generated from the tiered pricing and by charging businesses per contract or employee paid on the platform, increased 11x over the same period. 

According to its website, the New York-headquartered company has saved workers in emerging markets over $2.5 million in fees so far. As it looks to continue being profitable, a feat Cadana said it achieved last year, it’ll use the latest funds to expand its team, accelerate product development, and scale into new markets. 

source

solarkat
the authorsolarkat

Leave a Reply