Fintech Raises $175M in Debt and Capital for US Expansion

  • Wagestream raised $175 million in debt and equity financing.
  • The startup enables frontline workers to access their pay sooner.
  • The startup brought in new funding from Smash Capital and funds managed by Blackrock.

Wagestream, a UK-based startup that enables workers to access their pay earlier, raised $175m in debt and equity funding.

Founded in 2018, Wagestream works with employers to allow employees to take a percentage of their income during the month for a small, lump sum (£1.75/$2.3), which is increasingly covered by employers. Employers then effectively help to subsidize the services that are generally more expensive for lower paid workers in the hospitality, healthcare and retail sectors such as insurance products, utilities and credit or loans.

The company’s platform helps frontline workers track their shifts and pay each day, choose their own pay cycle, and set goals to build their savings. Around 1 million employees can access Wagestream from companies such as Bupa, Halfords, Pizza Hut, Co-op and the NHS.

“There’s a financial tsunami ahead for all workers, as wages aren’t going up much but the cost of living is going up,” Wagestream CEO Peter Briffett told Insider. He added that early access to wages was “not a magic wand”, but could help workers manage their finances.

Wagestream also aims to help frontline workers save at better interest rates and access goods and services at lower costs to counter, Briffett said, “poverty premium. Service workers are often paid weekly or bi-weekly, making it harder to save money by buying groceries in bulk or buying transit passes.

The startup’s Series C fundraising includes a $60 million equity investment led by Smash Capital, a venture capital fund set up by former Disney executives, alongside funds and accounts managed by BlackRock , and $115 million in debt financing from Silicon Valley Bank.

Wagestream will use the funding to expand into new products including insurance, utility switching and rental deposit sponsorship, Briffett said. It also plans to expand in the United States, after opening an office in Washington DC and recruiting some fifteen people. It is aiming for 45 by the end of 2022.

Wagestream is partly owned by financial charities including the Joseph Rowntree Foundation, Barrow Cadbury Trust, Social Tech Trust, Big Society Capital and the Fair by Design fund.

The fintech provided its latest funding in July 2020 with a $25 million raise from Northzone.

Check out Wagestream’s C-series pitch deck below:

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John A. Bogar