Nearly half of Americans live paycheck to paycheck and have less than $500 in savings. Any surprise expense can drag them into a debt cycle by payday lenders. Meanwhile, employers are getting creative with new financial wellness benefits to attract and retain employees amid the worker shortage.
New York-based Clair is a mission-driven fintech company behind the first free, consumer-friendly, on-demand pay solution backed by an FDIC-insured bank. It helps over 50,000 workers get paid as soon as they finish their shifts with zero fees. It is available at over 10,000 employers and a dozen workforce management platforms to increase employee retention and financial wellness amid front-line worker shortages.
Raises whopping $175M round
In a recent development, Claire has raised $175 million in funding to launch the first free, consumer-friendly, on-demand pay solution as a consumer lending program. The new program provides for a participation amount of up to $150 million, which allows front-line workers to take wage advances from Pathward. Through the partnership, consumers get access to Pathward established FDIC-insured Clair Spending and Savings Accounts, among other financial services.
The funding includes an additional $25 million in equity in a round led by Thrive Capital. Upfront Ventures and Kairos also participated in the equity round, bringing Clair’s total venture capital funding to $45 million. As part of the deal, Michael Presser, Investing Partner at Kairos, has been appointed as a board observer.
Clair will use the new funding to expand its team and accelerate adoption, especially among the 76 million hourly workers who represent 56% of the US workforce.
“Front-line workers are astonishingly underserved, as big banks don’t see them as profit drivers and aren’t building the solutions they need,” said Nico Simko, Co-founder and CEO of Clair. “This lack of support is unfair when half of Americans live paycheck to paycheck and don’t have $500 in savings for an emergency, so timely pay is crucial for them to keep up with their bills. We’re grateful to join forces with investors, partners and employers who believe in our mission of enabling people to responsibly customize their pay cycles to their needs.”
“We share common values with Clair, and our partnership has exponential power to increase financial access for more Americans regardless of the economic cycle,” said Pathward President Anthony Sharett. “Through our Banking as a Service solutions and strong risk and compliance framework, we’re proud to be their bank partner, supporting their issuing and lending needs to meet the evolving demands of their growing business.”
“Clair’s product has enabled both workers and employers to adapt in a uniquely challenging labor and economic environment,” said Kareem Zaki, Partner at Thrive Capital and Clair board member. “In addition to their exponential growth this past year, we’ve been pleased to see that Clair has consistently prioritized compliance and delivering tangible value to their customers.”
Launches Clair for Employers
Clair also announced the launch of Clair for Employers, a set of free, holistic financial wellness benefits for employees of businesses that are not on Clair’s partner platforms. Offering an on-demand pay benefit usually means human resources teams must commit significant time and resources to implement and manage it, but Clair for Employers integrates seamlessly with companies’ payroll providers for free.
The integration does not require ongoing maintenance and is fully compliant. Employees of companies using Clair for Employers also can access additional features in their Clair Spending Account, including 3% cash back on gas and groceries purchased on their Clair Debit Mastercard.
On-demand pay solution for frontline workers
Clair was founded in 2019 by Nico Simko, Alex Kostecki, and Erich Nussbaumer. Every Clair customer can access additional digital banking services, including a Spending Account; a high-yield savings account; and a Clair Debit Mastercard issued by Pathward with free withdrawals at 40,000 in-network ATMs, through a strategic partnership with Mastercard. Alos, the Clair mobile app is available on iOS and Android.
Companies using Clair to provide earned wage advances to employees include EverView, Viking Ranges, and SanStone Health & Rehabilitation, along with franchisees of DoubleTree by Hilton, Sheraton Hotels & Resorts, and GNC. This is a strong tool that may give employers an edge in attracting and retaining talent despite the worker shortage.
