Workplace bank provider Wagestream secures another £20m
Income streaming provider, Wagestream, has completed a £20m Series B funding round, taking its total raised to £65m.
The investment will be used to consolidate the London-based company’s market share in the UK and to fund its international expansion following launches in Spain, Netherlands, France and USA. Early-stage venture capital specialist Northzone is leading the funding round with participation from QED Investors, Latitude Ventures and Balderton Capital.
Wagestream enables staff to draw down a percentage of their earned wages any day of the month for a flat £1.75 fee. Demand for its product has skyrocketed among major UK brands over the past year, with new client sign-ups particularly strong in the second quarter as employers sought to make their staff more financially resilient in the face of Covid-19. New clients include Honest Burgers, SA Brain, Fuller’s and two NHS trusts (Camden & Islington NHS Foundation Trust and Lincolnshire Partnership NHS Foundation Trust).
By enabling staff to access their pay as they earn it, Wagestream gives them far greater flexibility with their finances. This means they can avoid taking out expensive short-term loan facilities or credit, should they be faced with a financial emergency. With Wagestream, there are no loans involved and therefore no interest is charged. Access to earnings means many forms of high-interest credit are easier to avoid.
Wagestream clients have identified a number of CSR and HR advantages to the service. For example, employees have greater financial flexibility and security, which increases staff loyalty. Employers trying to fill overtime shifts, particularly during unsociable hours, have noticed it becomes easier to do this once they use Wagestream because workers can access pay as soon as the shift is over.
Wagestream research found that shift workers choose to work 22% more hours on average once enrolled. It also found that 77% of users felt less stressed, 38% had avoided going into their overdraft and 43% said they’d avoided using a payday loan.
“Where people work and how they work is changing by the day, all the more so since Covid-19 struck,” said Peter Briffett, CEO and Co-Founder, Wagestream. “Now the way in which people get paid is changing, too, and at scale. Income streaming is a fast-growing alternative to the antiquated monthly pay cycle, and is being embraced by more brands, charities and organisations by the day as it boosts employees’ financial resilience.
“Each day, too many staff in too many companies are being forced into the hands of predatory payday lenders because they are only paid their earnings once every 30 days, enabling people to access their earned wages anytime keeps them out of debt and also incentivises them to do more shifts because they are motivated by the ability to use that extra income immediately to make specific purchases.”
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