Clair – a mission-driven fintech company – recently announced it raised $175 million in funding to launch the first free, consumer-friendly, on-demand pay solution as a consumer lending program backed by an FDIC-insured bank. And the new program offers a participation amount of up to $150 million, which enables front-line workers to take wage advances from Pathward.
With this partnership, consumers get access to Pathward’s established FDIC-insured Clair Spending and Savings Accounts among other financial services. And the funding includes an additional $25 million in equity in a round led by Thrive Capital. Upfront Ventures and Kairos also joined 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.
On the heels of 10 times revenue growth this past year, 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 U.S. workforce. And through integrations with platforms like TCP Software’s Humanity Scheduling, When I Work, Gusto Embedded, and 7shifts, Clair is already helping over 50,000 workers get paid as soon as they finish their shifts instead of waiting weeks for a paycheck – with zero fees. Plus Clair’s mobile banking app enables mainly millennial and Gen Z customers to avoid paying $15 million a year in overdraft fees and using payday lenders that can charge more than 600% APR.
Small and large businesses have embraced this solution amid the front-line worker shortage with 4 million more job openings than people to fill them as they are seeking unique benefits to attract and keep employees. And 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 could give employers an edge in attracting and retaining talent despite the worker shortage.
Clair also announced the launch of Clair for Employers, which is a set of free and holistic financial wellness benefits for employees of businesses that are not on Clair’s partner platforms. And 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. This integration does not require ongoing maintenance and is fully compliant. Employees of companies using Clair for Employers can also access additional features in their Clair Spending Account, including 3% cash back on gas and groceries purchased on their Clair Debit Mastercard.
Clair launched in 2019, inspired by Simko’s experience as an Argentinian-Swiss immigrant working an hourly job in the U.S. Beyond on-demand pay, 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.
KEY QUOTES:
“Front-line workers are astonishingly underserved, as big banks don’t see them as profit drivers and aren’t building the solutions they need. 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.”
— Nico Simko, Co-founder and CEO of Clair
“We share common values with Clair, and our partnership has exponential power to increase financial access for more Americans regardless of the economic cycle. 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.”
— Pathward President Anthony Sharett
“Clair’s product has enabled both workers and employers to adapt in a uniquely challenging labor and economic environment. 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.”
— Kareem Zaki, Partner at Thrive Capital and Clair board member
