After elevating $9 million in a Sequence A extension spherical in late 2024, the Nigerian HR Software program-as-a-service (SaaS) firm SeamlessHR initiated casual discussions with competitor PaidHR a few doable acquisition, in line with a number of sources accustomed to the discussions. Nevertheless, these early stage talks didn’t progress to a proper provide or settlement, the identical individuals mentioned.
In response to one individual near the discussions who requested anonymity because of the delicate nature of the talks, SeamlessHR initiated these casual conversations within the fourth quarter of 2024 however was rebuffed.
Usually, a proper acquisition provide entails sending a sign of curiosity (IOI), whereas casual talks usually happen with out paperwork. No formal IOI was ever introduced on this case.
As an alternative of specializing in acquisition alternatives, PaidHR has continued to give attention to its aggressive progress trajectory. Since its 2020 launch, the corporate has quickly expanded, providing key payroll and HR companies to over 200 companies, together with main Nigerian corporations reminiscent of Flutterwave, Oando, and Mavin Group.
In 2023, it paid ₦11 billion ($77 million) in shopper salaries, a major bounce from ₦2.7 billion ($18.5 million) in 2022. The corporate has additionally invested closely in cross-border payroll know-how, which many view as a novel aggressive benefit.
The acquisition would have allowed SeamlessHR, based in 2018, to consolidate its place within the fiercely aggressive HR-tech area. A profitable deal would have enabled SeamlessHR to soak up PaidHR’s buyer base in an area the place buyer acquisition is pricey and switching prices are excessive.
Each firms declined to touch upon the matter.
SeamlessHR confirmed, nonetheless, that no formal acquisition discussions passed off.
The Nigerian HR-tech sector has develop into more and more fragmented, with firms like BizEdge, PaidHR, Motherboard, Bento Africa, NotchHR, and Ropay all vying for market share. This rising competitors has made it tougher for a transparent market chief to emerge, however there have been notable developments within the area.
PaidHR’s cross-border payroll system, which allows firms to pay workers in several nations utilizing native currencies, has been a standout function since its launch. Inside 10 weeks of launch, it contributed 9% of PaidHR’s income, mentioned an organization government who requested to not be named as a result of they weren’t authorised to talk to the press.
The cross-border functionality is a key motive SeamlessHR reached out, the identical individual mentioned. The function would have complemented SeamlessHR’s product suite, together with HR administration, efficiency administration, go away and payroll administration, recruitment, and HR analytics.
As well as, the broader HR-tech sector in Nigeria is more and more seen as ripe for consolidation. With over 20 firms competing in a crowded market, trade specialists consider the sector would profit from decreased fragmentation.
“The HR Payroll area will profit from contraction,” mentioned the CEO of 1 HR-SaaS startup who requested to not be named so he may communicate freely. “The ecosystem is healthier served by a number of bigger firms that may ship high-quality companies, quite than many small ones which will wrestle with scaling.”
Nevertheless, different trade stakeholders warning that sub-Saharan Africa’s HR-tech area could not but be prepared for consolidation. “Most gamers within the area are nonetheless within the early levels of product growth,” mentioned one other HR-SaaS CEO, who additionally spoke anonymously. “For consolidation to succeed, firms have to have reached product maturity.”
Deel’s acquisition of South Africa’s PaySpace was doable as a result of the corporate had been in operation for over 20 years, giving it the time to refine its product and set up a mature providing, the identical individual added.