Wagestream raises USD 175 mln

This is a Series C and it’s coming in the form of USD 60 million in equity and USD 115 million in debt. The equity portion is being led by Smash Capital, funds and accounts managed by BlackRock; and the debt financing is coming from Silicon Valley Bank. Wagestream has raised about USD 257 million in debt and equity, and it is not disclosing its valuation with this round. Notable to the company’s structure and cap table is that it is built on a social charter and is part-owned by UK-based financial charities and impact funds – specifically, the Joseph Rowntree Foundation, Barrow Cadbury Trust, Social Tech Trust, Big Society Capital, and the Fair by Design fund. 

Currently more than 1 million workers across 300 employers have access to the app globally. It’s been seeing the strongest growth most recently in the US, where 250,000 retail, hospitality, and healthcare workers have access to Wagestream through their employers (the deal is done with the latter but it’s up to the workers themselves whether they want to use it or not). Customers include names like Burger King, Popeyes, Crate & Barrel, and University of Chicago. Other markets in addition the US and UK where Wagestream is currently active include Spain and Australia.

The pain point that it’s addressing is a simple one: waged workers, partly because of how they are paid and how much they are paid, often find it challenging to save money against spending it paycheck to paycheck. Part of that is because of the sheer amount of money that they have, but part is also the cadence of how they get paid (weekly or biweekly versus monthly) and simply the tools that are incorporated into their pay to make it easier to save and use the funds for more than regular day-to-day living. The idea with Wagestream is not just to give those workers faster liquidity when they need it, but to give them the ability to use that money in different ways – for example, with features to invest small amounts into stocks, and to bring in controls to save money incrementally in a way that makes the most practical sense for those users. There are also options to consult with a financial coach, and like other neobanks’ super apps, Wagestream ‘learns’ about users to personalise further suggestions regarding a users’ finances, TechCrunch states.