Fintech startup Cadana closed a seed funding round of $7.1 million aimed at accelerating and streamlining remittance for African talents.
Cadana focuses on emerging markets, offering payroll services to global banks and hiring platforms.
Leading the recent seeding round was Costanoa Ventures, with other participants like 500 Startups and Better Tomorrow Ventures also contributing.
The Startup
Since its launch in January 2021, Cadana has managed to raise funds of around $7.4 million. This includes pre-seed funding worth $325,000 in 2021.
Ameer Shujjah from Pakistan and Albert Owusu-Asare from Ghana founded Cadana in 2021. HR providers, staffing companies and talent marketplaces use the payroll services it offers.
Thanks to Cadana, they are able to pay their workers across 32 emerging markets, including Ghana and Nigeria.
According to the company, it empowers talents in emerging markets, including Africa, to gain access to job opportunities globally.
The two co-founders are both US immigrants and had initially launched Cadana in specific African markets as an earned wage access (EWA) platform.
The co-founders had met in college, as they were physics and computer science majors. After the launch of the company, they realized that a range of payroll issues could be resolved.
The Challenge
Therefore, salary-on-demand is no longer Cadana’s primary offering. Instead, it is one part of the company’s global payroll services and software to entities in emerging markets.
The global freelancer market is valued at $1.3 trillion with over 200 million workers currently working in it. This has driven up demand for solutions for streamlining tax and employment regulations and automating payroll.
But, emerging markets like Africa have different employment laws that have made most existing products inadequate.
Global hiring platforms have to deal with the challenge of dealing with local laws themselves rather than using third-party providers for payroll.
Therefore, remote workers in Africa have to wait for getting their earnings and pay hefty remittance fees.
The Solution
According to Cadana, its white label products and API are designed to solve these problems.
This is because they allow global workforces to integrate payroll and payment management within existing systems.
Owusu-Asare said that the company’s customers in emerging markets were happy with their services. The CEO said that they had focused on developing a robust local infrastructure to address the issues.
He said that in the three years of its operations, Cadana had integrated local payments, benefit systems and compliance to cater to their clients in a better way.
Real-time payments can also be made via Cadana with fees below $3. Users also have the option of investing in USD-denominated assets, such as stocks.
RemotePass, based in the UAE, is one of Cadana’s major competitors, as it also focuses on emerging markets.
According to Owusu-Asare, their expertise in accelerating and streamlining remittance for Latin American, Asian and African talents gives them an advantage.