Wagestream raises £40m for “get-paid-as-you-earn” service
Wagestream has raised £40 million to fund its ‘get-paid-as-you-earn’ service designed to tackle payday poverty, reports Jane Connolly.
With a £15 million Series A round led by Balderton and Northzone and a funding facility of up to £25 million from Shawbrook, Wagestream has attracted the UK’s largest pool of social impact investment.
Aiming to help people avoid payday loans and the “Poverty Premium” that people on low incomes may pay for essential products and services, Wagestream allows workers to access their earnings in real time.
For a flat fee of £1.75, employees can draw down a percentage of their earned wages on any day of the month, interest-free.
“The antiquated monthly pay cycle inflicts huge financial damage on household finances and its days are numbered,” says CEO and founder Peter Briffett. “Too many people are pushed into a corner by in-work poverty and forced into the hands of payday lenders and high-cost credit.”
Among the companies that have adopted Wagestream are David Lloyd, Rentokil Plc, Camden Town Brewery, Slug and Lettuce and Carluccio’s, giving over 120,000 UK employees access to their wages as they earn.
Rob Moffat, partner at Balderton Capital, says the company was impressed by Wagestream’s “universal positive feedback”.
He adds: “Companies used to take an active role in supporting the financial health of their users but this has slowly been eroded, to the extent where employees paid at the end of the month are effectively subsidising their employer for 29 days a month. Wagestream starts to restore the right balance.”
Wagestream says clients have identified improved staff loyalty as one of the platform’s benefits.