After raising $9 million in a Series A extension round in late 2024, the Nigerian HR Software-as-a-service (SaaS) company SeamlessHR initiated informal discussions with competitor PaidHR about a possible acquisition, according to multiple sources familiar with the discussions. However, those early stage talks did not progress to a formal offer or agreement, the same people said.
According to one person close to the discussions who requested anonymity due to the sensitive nature of the talks, SeamlessHR initiated those informal conversations in the fourth quarter of 2024 but was rebuffed.
Typically, a formal acquisition offer involves sending an indication of interest (IOI), while informal talks often occur without paperwork. No formal IOI was ever presented in this case.
Instead of focusing on acquisition opportunities, PaidHR has continued to focus on its aggressive growth trajectory. Since its 2020 launch, the company has rapidly expanded, offering key payroll and HR services to over 200 businesses, including major Nigerian firms such as Flutterwave, Oando, and Mavin Group.
In 2023, it paid ₦11 billion ($77 million) in client salaries, a significant jump from ₦2.7 billion ($18.5 million) in 2022. The company has also invested heavily in cross-border payroll technology, which many view as a unique competitive advantage.
The acquisition would have allowed SeamlessHR, founded in 2018, to consolidate its position in the fiercely competitive HR-tech space. A successful deal would have enabled SeamlessHR to absorb PaidHR’s customer base in a space where customer acquisition is expensive and switching costs are high.
Both companies declined to comment on the matter.
SeamlessHR confirmed, however, that no formal acquisition discussions took place.
The Nigerian HR-tech sector has become increasingly fragmented, with companies like BizEdge, PaidHR, Motherboard, Bento Africa, NotchHR, and Ropay all vying for market share. This growing competition has made it more challenging for a clear market leader to emerge, but there have been notable developments in the space.
PaidHR’s cross-border payroll system, which enables companies to pay employees in different countries using local currencies, has been a standout feature since its launch. Within 10 weeks of launch, it contributed 9% of PaidHR’s revenue, said a company executive who asked not to be named because they were not authorised to speak to the press.
The cross-border capability is a key reason SeamlessHR reached out, the same person said. The feature would have complemented SeamlessHR’s product suite, including HR management, performance management, leave and payroll management, recruitment, and HR analytics.
In addition, the broader HR-tech sector in Nigeria is increasingly seen as ripe for consolidation. With over 20 companies competing in a crowded market, industry experts believe the sector would benefit from reduced 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.”
However, other industry stakeholders caution that sub-Saharan Africa’s HR-tech space may not yet be ready for consolidation. “Most players in the region are still in the early stages of product development,” said another HR-SaaS CEO, who also spoke anonymously. “For consolidation to succeed, companies need to have reached product maturity.”
Deel’s acquisition of South Africa’s PaySpace was possible because the company had been in operation for over two decades, giving it the time to refine its product and establish a mature offering, the same person added.
