Wagestream, a financial super app for waged workers, raises $175M, passes 1M users and doubles down on the U.S.

Spread the love

Front-line workers and those paid in hourly wages rather than salaries have become a prime target in the world of business IT, with a wave of apps helping them find jobs, do their jobs, communicate with each other better. In the latest development, a UK startup building what it describes as a financial “super app” specifically for waged workers and their financial well-being is announcing a round of funding to double down on its strategy. Wagestream, known best for working with employers to enable salary advances for employees by way of an app, has raised $175 million, money that it will use to continue adding in more features to the app, and to fuel a big push into the U.S. market.

“We are trying to solve workers’ financial pains,” said Peter Briffett, the CEO who co-founded the company with Portman Wills (CTO). “We’re building a positive route for frontline workers, who can now have $60,000 to $70,000 in savings for the first time.”

This is a Series C and it’s coming in the form of $60 million in equity and $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 $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 — and one key way that it has differentiated itself from the cloud hanging over the concept of “payday lenders” in the UK and the U.S. — 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 FoundationBarrow Cadbury TrustSocial Tech TrustBig Society Capital, and the Fair by Design fund. Other backers in previous rounds have included Village Global, the social impact VC backed by the likes of Jeff Bezos and Bill Gates.

As a measure of how Wagestream is doing, the company has been on a roll in its growth. 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 U.S., 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 big names like Burger King, Popeyes, Crate & Barrel and University of Chicago.

Other markets in addition the U.S. and U.K. 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 very 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 bi-weekly 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 similar to other neobanks’ superapps, Wagestream “learns” about users to personalise further suggestions regarding a users’ finances.

What has been interesting, Wills said, was that employers themselves are “leaning in” to working with Wagestream more because they’ve started to see it as a sweetener when they are recruiting staff, and also to help with reducing employee churn, which is a persistent problem in the waged-working world.

He noted that there are currently some 12,000 jobs listed on Indeed.com (a commonly used recruiting platform in this sector) that advertise Wagestream as a benefit for those interested in applying.

“It’s hard to recruit people and we become a retention and recruitment benefit,” he said. “And we found that people actually do more hours of work if they have earlier access to the money they will be paid. It helps them budget their financial lives better.”

The move into the U.S. will bring a new set of challenges to Wagestream, but also potentially new opportunities. The U.K., where it has most of its customers today, has 11 major banks, and most people have bank accounts, not least because it’s completely free for them — no fees and so on — and so many people have their paychecks directly funneled there. This has meant that Wagestream hasn’t focused on building a “banking app” for U.K. users.

The U.S. on the other hand has no less than 4,300 banks, and yet it still has a massive population of “unbanked” and “underbanked” among waged workers because in fact a lot of banks charge a various set of fees, making it a cost many do not want to bear.

“Around 28% are using check cashing services” — rather than getting funds paid into accounts, Wills said. “This means a paper paycheck and paying someone 10-12% of net wages to cash a check. So a prepaid card product is very high on the roadmap in the U.S. for us.” This would give users the option of foregoing a check cashing service and the associated fees, and potentially using that cut for something else, like investments.

Covid-19 put a spotlight on frontline workers — the essential people who had to continue doing their jobs in tough circumstances while so many others were ensconced in home offices — and their ranks are definitely not going away, with an estimated 2 billion of them globally. It’s frankly great to see more being built to address their needs.

“The combination of financial exclusion and a rising cost of living have created severe financial stress for hard-working Americans,” said Brad Twohig, Managing Partner at Smash Capital, in a statement. “We’ve invested in Wagestream because its team has reimagined the world of work making it more accessible and rewarding for millions of people.”

33 thoughts on “Wagestream, a financial super app for waged workers, raises $175M, passes 1M users and doubles down on the U.S.

  1. Pretty great post. I simply stumbled upon your weblog and wanted to mention that I have truly loved browsing your
    blog posts. After all I will be subscribing to your feed
    and I hope you write again soon!

  2. I will right away grasp your rss feed as I can not to find your e-mail subscription hyperlink or newsletter service.
    Do you have any? Kindly allow me recognise in order that
    I could subscribe. Thanks.

  3. Hi there! I could have sworn I’ve been to this website before but
    after reading through some of the post I realized it’s new to me.

    Nonetheless, I’m definitely glad I found it and I’ll be book-marking and checking back frequently!

  4. I just like the helpful info you supply in your articles.
    I’ll bookmark your weblog and check once more right
    here frequently. I am slightly sure I will learn many new stuff
    proper right here! Good luck for the following!

  5. Howdy! Do you know if they make any plugins to assist with Search Engine Optimization? I’m trying to get my blog to rank
    for some targeted keywords but I’m not seeing very good
    success. If you know of any please share. Kudos!

  6. You have made some really good points there. I
    checked on the net to find out more about the issue and found most individuals
    will go along with your views on this web

  7. I have read several good stuff here. Certainly price bookmarking for revisiting.
    I wonder how so much attempt you place to make
    such a magnificent informative web site.

  8. I loved as much as you’ll receive carried out right here.
    The sketch is tasteful, your authored subject matter stylish.
    nonetheless, you command get bought an shakiness over that you wish be delivering the
    following. unwell unquestionably come further formerly again as exactly the same nearly very often inside case you shield this hike.

  9. I absolutely love your blog.. Great colors & theme.

    Did you build this amazing site yourself? Please reply back as I’m
    planning to create my very own site and want to know where
    you got this from or exactly what the theme is called. Kudos!

  10. Admiring the commitment you put into your blog and detailed information you provide.
    It’s nice to come across a blog every once in a while that isn’t the same
    outdated rehashed material. Fantastic read! I’ve bookmarked your site and I’m including your RSS
    feeds to my Google account.

  11. Its like you learn my mind! You appear to grasp so much approximately this, like you
    wrote the e-book in it or something. I believe that you just can do
    with a few percent to pressure the message home
    a bit, but instead of that, that is fantastic blog.
    A great read. I’ll certainly be back.

  12. Awesome blog! Do you have any hints for aspiring writers?

    I’m hoping to start my own website soon but I’m a little lost on everything.
    Would you suggest starting with a free platform like WordPress or go for a paid option? There are so many choices out there that I’m completely confused ..
    Any tips? Kudos!

  13. We are a bunch of volunteers and starting a new scheme in our community.
    Your site offered us with useful information to work on. You’ve performed a formidable activity and
    our entire community shall be grateful to you.

  14. This design is incredible! You most certainly
    know how to keep a reader entertained. Between your wit and your videos, I was almost moved to start my own blog (well, almost…HaHa!)
    Fantastic job. I really enjoyed what you had to say, and
    more than that, how you presented it. Too cool!

  15. Awesome site you have here but I was wanting to know if
    you knew of any discussion boards that cover the same topics discussed in this article?
    I’d really like to be a part of online community where I can get responses from other knowledgeable people that share the same interest.
    If you have any suggestions, please let me know. Thank you!

  16. Heya are using WordPress for your site platform? I’m new to the
    blog world but I’m trying to get started and set up my own. Do you need any html coding knowledge to make
    your own blog? Any help would be really appreciated!

  17. Oh my goodness! a tremendous article dude. Thank you Nonetheless I’m experiencing issue with ur rss . Don抰 know why Unable to subscribe to it. Is there anybody getting equivalent rss downside? Anyone who knows kindly respond. Thnkx

  18. Youre so cool! I dont suppose Ive learn anything like this before. So good to find anyone with some unique ideas on this subject. realy thanks for starting this up. this website is one thing that is wanted on the web, somebody with a bit originality. useful job for bringing one thing new to the internet!

  19. I found your weblog website on google and examine a few of your early posts. Proceed to maintain up the superb operate. I simply further up your RSS feed to my MSN Information Reader. Searching for ahead to reading extra from you in a while!?

  20. Youre so cool! I dont suppose Ive learn something like this before. So nice to seek out someone with some original ideas on this subject. realy thank you for beginning this up. this web site is something that’s wanted on the net, somebody with a bit of originality. useful job for bringing one thing new to the internet!

Leave a Reply

Your email address will not be published. Required fields are marked *