A source close to the negotiations, who wished to remain anonymous due to the confidential nature of the discussions, indicated that SeamlessHR initiated these informal conversations in the fourth quarter of 2024 but faced rejection.
Typically, a formal acquisition process includes the submission of an indication of interest (IOI), while informal discussions often occur without any documentation. In this instance, no formal IOI was ever submitted.
Rather than pursuing acquisition opportunities, PaidHR has maintained its focus on aggressive growth. Since its inception in 2020, the company has rapidly scaled its operations, providing essential payroll and HR services to over 200 clients, including prominent Nigerian companies like Flutterwave, Oando, and Mavin Group.
In 2023, PaidHR disbursed ₦11 billion ($77 million) in client salaries, a substantial increase from ₦2.7 billion ($18.5 million) in 2022. The company has also made significant investments in cross-border payroll technology, which is widely regarded as a distinctive competitive edge.
An acquisition would have enabled SeamlessHR, established in 2018, to strengthen its foothold in the highly competitive HR technology sector. A successful transaction would have allowed SeamlessHR to integrate PaidHR’s customer base in a market where acquiring new customers is costly and switching barriers are significant.
Both companies have opted not to comment on the situation.
However, SeamlessHR has confirmed that no formal acquisition discussions occurred.
The Nigerian HR-tech landscape has become notably fragmented, with various companies such as BizEdge, PaidHR, Motherboard, Bento Africa, NotchHR, and Ropay competing for market dominance. This intensifying competition has complicated the emergence of a definitive market leader, although significant advancements have been observed within the sector.
A highlight in this space is PaidHR’s cross-border payroll system, which allows businesses to compensate employees across different countries in local currencies. Since its introduction, this feature has significantly impacted PaidHR’s revenue, accounting for 9% within just ten weeks, according to a company executive who preferred to remain anonymous due to restrictions on speaking to the media.
The cross-border functionality was a primary factor for SeamlessHR's interest, as noted by the same source. This feature would have enhanced SeamlessHR’s existing offerings, which include HR management, performance management, leave and payroll management, recruitment, and HR analytics.
Moreover, the overall HR-tech sector in Nigeria is increasingly perceived as being poised for consolidation. With more than 20 companies operating in a saturated market, industry analysts suggest that the sector could benefit from decreased fragmentation.
“The HR Payroll space will benefit from contraction,” said the CEO of one HR-SaaS startup who asked not to be named so he could speak freely. “The ecosystem is better served by a few larger companies that can deliver high-quality services, rather than many small ones that may struggle with scaling.”
Conversely, some industry participants warn that the HR-tech environment in sub-Saharan Africa may not yet be prepared for consolidation. “Most players in the region are still in the early stages of product development,” remarked another HR-SaaS CEO, who also chose to speak anonymously. “For consolidation to succeed, companies need to have reached product maturity.”
Deel’s acquisition of South Africa’s PaySpace exemplifies this, as the company had been operational for over two decades, allowing it to refine its product and develop a mature offering.
Deel's acquisition of PaySpace, a South African company with over twenty years of experience, highlights this point, as its long-standing operations have enabled the refinement of its product and the establishment of a well-developed offering.