By Liza Tetley on Wednesday 13 April 2022
The financial wellbeing app’s series C fundraise will be used to expand services for underserved, financially stressed workers.
UK-headquartered financial wellbeing app, Wagestream, has closed a series C funding round of $175m, comprising $60m in equity and $115m in debt financing, as it looks to scale its support for underserved workers.
The company plans to use the funding – which it believes is the most ever raised for a social impact fintech – to expand the financial services offering on its app and grow Wagestream’s teams outside the UK.
“When we launched Wagestream, many employers viewed financial wellbeing in the workplace as a long-term aspiration; now they realise it is a national emergency,” said Peter Briffett, Wagestream’s CEO and co-founder.
“93 per cent of companies we recently surveyed plan to put a financial wellbeing program in place – up from 51 percent just one year ago. By addressing the financial wellbeing of their employees, employers become the hero and solve their own HR challenges in the process – from recruitment, to retention, to productivity.”
Wagestream says it designed its services to meet the needs of frontline workers that have been excluded or forced to pay more for financial services compared to those making a set salary or higher wages – the additional costs equate to a premium of £490 per year, according to research by the University of Bristol.
The funding round was led by Smash Capital, and featured involvement by new investor BlackRock, as well as existing shareholders Balderton Capital, Northzone, and charity fund, Fair By Design. Debt financing was provided by Silicon Valley Bank.
“Financial exclusion and a rising cost of living have created severe financial stress for hard-working people around the world,” said Brad Twohig, Managing Partner at Smash Capital.
“We’ve invested in Wagestream because its team has reimagined the world of work to solve that problem - making it more inclusive and rewarding for millions of people.”
Starting life in 2018, the company describes itself as being “founded with charities, designed for frontline workers and built around pay”.
Serving customers such as Bupa, Hilton, Halfords, and the NHS, workers can use Wagestream to choose their pay cycle, manage their budgeting, and saving for a rainy day.
One million workers now use Wagestream globally through over 300 employers in the U.S., U.K., Spain and Australia.
“It’s time for fintech to tackle the premium that underserved, frontline workers - 2.7bn people globally - pay for access to basic financial services,” added Emma Steele, Partner for the Fair by Design fund. "As a pre-seed backer of Wagestream, we’ve watched the business quickly evolve from its ‘beachhead’ flexible pay tool proposition to a global fintech scale-up, bringing a broad range of financial wellbeing tools to over one million people and growing at an impressive scale."
The company says that 77 per cent of people using its app report feeling less stressed, and 72 per cent report an improved quality of life.