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Wagestream snaps $175M; UK fintech backed by Jeff Bezos and Mark Zuckerberg working to end payday poverty cycle

Wagestream Co-Founders
Image credits: Wagestream

Wagestream, the financial well-being app that’s aiming at reducing the poverty premium and preventing employees from entering cycles of debt has closed a $175 million Series C funding round.

This come’s in time to help Wagestream‘s preparation to build a broader set of fair financial services within the app and scale up its growing teams outside the U.K, in the U.S., Spain and Australia.

This offering is interestingly believed to be the largest ever raised for a social impact fintech, for now. It comprises a $60M equity investment led by new investors Smash Capital and BlackRock on top of follow-on investments from existing shareholders Balderton Capital, Northzone, charity fund Fair By Design as well as $115M in debt financing from Silicon Valley Bank.

Underpaid, undervalued & essential

Waged workers are increasingly finding it very challenging to save money, ending up living a paycheck to paycheck life. The reason behind this is majorly in how they earn. Monthly models of pay are forcing these workers to seek out liquidity from often expensive options such as credit cards and payday loans, just to mention a few.

In the UK frontline workers have been observed to be excluded or forced to pay more for financial services than other workers. The University of Bristol’s research indicates they pay a premium of £490 more for basic household and financial services each year.

On the other hand, in the US, a massive population of “unbanked” and “underbanked” waged workers exists despite the country having no less than 4,300 banks. This is largely a result of the exorbitant fees charged, making it a cost many do not want to bear.

“Financial exclusion and a rising cost of living have created severe financial stress for hard-working people around the world,” commented Brad Twohig, a Managing Partner at Smash Capital.

Accessing Wagestream

Employers in industries such as hospitality, healthcare and retail subsidise the service for their workers, allowing them access to Wagestream as well. Prioritising financial inclusion, the app provides a variety of financial services to help workers build up their financial health over time.

Workers via Wagestream can track their shifts and pay every day, pick their own pay cycle, build up savings and win awards, set money goals and chat to a personal financial coach. Wagestream also grants its users fairer deals than elsewhere on financial products like insurance, utilities and credit for essential services.

By addressing the financial well-being of their employees, employers have become heroes and are solving their own HR challenges, from recruitment to talent retention and productivity.

Massive names in Wagestream’s investors & client list

The Financial well-being company was founded in 2018 by Peter Briffett and Portman Wills. Wagestream, according to the Founders is designed for frontline workers and built around pay.

Wagestream is already offered through employers like Bupa, Hilton, Halfords, Pizza Hut, Greene King, Co-op and the NHS. It is making work more inclusive, fair and rewarding for a million people, by availing them the access to fair financial services built around their pay. Already, over 70% of people using Wagestream feel better in control of their money, resulting in a happier, healthier and more productive workforce.

Wagestream’s capital structure is remarkably built on a social charter that’s part-owned by UK-based financial charities and impact funds, specifically, the Joseph Rowntree Foundation, Social Tech Trust, Barrow Cadbury Trust, the Fair by Design Fund and Big Society Capital. Other notable backers in past rounds have included Village Global, the social impact VC backed by titans like Jeff Bezos, Mark Zuckerberg and Bill Gates.

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