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African fintech closes $4 million Series A round

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Nigerian fintech Earnipay has closed a Series A funding round, raising $4 million.

Nigerian fintech Earnipay has closed a Series A funding round, raising $4 million.

O’Melveny & Myers provided legal counsel to Earnipay on the transaction, which was announced on February 17.

The funding round was led by venture capital firm Canaan and included participation from Musha Ventures, Ventures Platform, Village Global, Voltron Capital and XYZ Ventures.

Headquartered in Lagos, Earnipay uses technology to provide pre-payday access to already earned wages, sometimes defined as an Earned Wage Access (EWA) service, and also offers financial education.

According to a study cited by Canaan, EWA solutions are “a natural solution for Africa” ​​as they “[enable] employees to avoid late fees on things like home and loan payments” and offer an alternative to punitive payday loans.

Founded in 1987, Canaan focuses on investing in early stage consumer technology, fintech and life sciences companies. It has raised $6 billion through 12 funds to date. Earnipay is his fourth African portfolio company.

O’Melveny employed a team led by merger and acquisition partners Brian Covotta and Warren Lazarow.

Last December, Charles Russell Speechlys advised data science company FairXchange on the sale of a 25 percent stake in United Fintech.