Earnipay lays off staff as it focuses on business lending, joining a wave of African startups rethinking growth amid a harsh funding climate.

Earnipay, the Nigerian fintech best known for its earned wage access (EWA) product, has laid off a portion of its team in a move founder and CEO Nonso Onwuzulike describes as “difficult but necessary.”

In a statement seen by Condia, he cited the company’s high burn rate and a shift in focus toward its most profitable segment—business lending—as the primary reasons for the decision.

The layoffs come just over two years after Earnipay raised a $4 million seed roundbacked by Canaan, Ventures Platform, and Voltron Capital, among others. At the time, the startup planned to scale its EWA platform across Nigeria and partner with employers to allow staff access to earned salaries on-demand, outside traditional monthly pay cycles. Since then, Earnipay has expanded its suite to include a payroll system, a neobank for salaried workers, and most recently, Earnipay Business—an all-in-one growth platform for SMEs.

But that expansion has come at a cost. According to Nonso, the company spends roughly four times its revenue on product development and growth, particularly outside its lending vertical. “We had hoped to grow into our cost structure,” he wrote, “but some products aren’t generating enough revenue to justify the burn.” Without a significant correction, he said, the startup risked running out of money.

The macroeconomic backdrop hasn’t helped. In 2024, African startups raised $2.01 billionacross 182 deals, a 31% drop from the $2.9 billion secured in 2023, and a far cry from the over $4 billion recorded in 2022​. Fintechs still led with $882.43 million in funding, but capital is more concentrated and harder to access, particularly for startups without a clear path to profitability. Nigeria, Earnipay’s home market, saw only $331.52 million in startup funding in 2024—less than Kenya or South Africa—highlighting the regional funding squeeze. In this climate, several other startups including Kuda, 54gene, and Chipper Cash have also resorted to layoffs and restructuring in a bid to extend the runway and survive the downturn.

Earnipay’s decision also reflects a growing realism among African founders: that profitability, not just scale, is now the benchmark for long-term survival. “Given today’s market conditions, raising more capital isn’t guaranteed,” Nonso said. As such, the company will scale back its non-core services and double down on lending, which remains its primary revenue driver.

To support affected employees, Earnipay is offering two months’ salary as severance, HMO coverage through year-end, subsidised access to work laptops, and job-seeking support. “This decision does not reflect your contributions,” Nonso said. “You’ve helped build Earnipay into what it is today.”

While the number of people affected was not disclosed, those remaining have been asked to rally around the company’s new direction: stabilising operations and building toward profitability. Whether this pared-down vision helps Earnipay weather the storm and outlast the downturn remains to be seen—but it’s clear that survival now requires sharper focus than ever before.