- Wagestream recently announced it raised $175 million in a Series C round of funding. These are the details.
Wagestream – the financial wellbeing app founded by charities and designed for frontline workers – recently announced it has closed a $175 million Series C funding round as it prepares to scale up support for underserved, financially stressed workers across North America and beyond.
Frontline workers have been excluded or forced to pay more for the financial services they need compared to those making a set salary or higher wages. And with a social charter at its core, Wagestream was founded in 2018 by Peter Briffett (CEO), Portman Wills (CTO) and a group of leading financial charities to solve this problem by giving people access to a set of fairer financial services, delivered through their employer, and built around flexible pay (also known as earned wage access). Originally launched in the UK, the Series C capital primarily will be used for scaling up Wagestream’s presence in new markets such as the U.S. – the company’s fastest-growing market.
Workers can Wagestream through participating employers, who subsidize the service. And the app syncs with payroll systems and allows employees to access and manage their income – either directly through the app, or as an integration with workforce management technology partners. Additionally, with financial inclusion in mind, the app provides users with a variety of financial services to help them build up their financial health over time. For example, people are able to choose how often they’re paid, track their shifts and pay each day, build savings and win prizes, access free financial coaching, and get fairer deals on products – like insurance and utilities – than they would have access to elsewhere.
The funding round is led by new investors Smash Capital, a U.S.-based investment firm focused on later-stage consumer Internet and technology companies. And Smash’s prior investments include Epic Games, Reddit, SonderMind, and DuckDuckGo, among others. Smash’s founders previously led investments for The Walt Disney Company and leading venture capital firms. This funding round also includes new investors BlackRock, joined by follow-on investments from existing shareholders Balderton Capital, Northzone, charity fund Fair By Design, and new financing from Silicon Valley Bank.
Over 1 million workers in industries such as retail, hospitality, and healthcare are currently able to use the app through employers including Burger King, Pizza Hut, Crate & Barrel, Bupa, and the UK’s National Health Service. One million workers now can access Wagestream globally through over 300 employers in the U.S., UK, Spain, and Australia.
Part-owned by financial charities and impact funds including Joseph Rowntree Foundation, Barrow Cadbury Trust, Social Tech Trust, Big Society Capital, and the Fair By Design fund, Wagestream operates under a social charter written into the company’s articles of association. And the charter ensures that the company can only offer financial services which improve workers’ financial wellbeing. Plus all of Wagestream’s investors – including participants in the new Series C round – agree to that social charter, meaning it cannot prioritize growth and profit above the wellbeing of end customers. Wagestream is the only financial well-being provider known to adhere to these standards.
As part of its social charter, Wagestream is accountable to an Impact Advisory Board and reports on social impact to its shareholders each quarter.
Wagestream also puts research, data, and customer co-creation at the heart of its product roadmap, and publishes a bi-annual Impact Assessment – which tracks the impact of its financial services on end customers. And he app outperforms global benchmarks on financial inclusion set by independent impact measurement firm, 60 Decibels, according to Wagestream research, with 77% of people reporting feeling less stressed, and 72% reporting improved quality of life.
KEY QUOTES:
“When we launched Wagestream, many employers viewed financial wellbeing in the workplace as a long-term aspiration; now they realize it is an emergency. For example, 93% of companies we recently surveyed plan to put a financial wellbeing program in place, and we’re seeing a similar shift in the U.S. By addressing the financial well-being of their employees, employers become the hero and solve their own HR challenges in the process – from recruitment, to retention, to productivity.”
— Peter Briffett, Wagestream CEO and co-founder
“The combination of financial exclusion and a rising cost of living have created severe financial stress for hard-working Americans. We’ve invested in Wagestream because its team has reimagined the world of work making it more accessible and rewarding for millions of people.”
— Brad Twohig, managing partner at Smash Capital
“It’s time for fintech businesses to reach and include the 2.7bn global frontline workforce in a fair financial system. As a pre-seed backer of Wagestream, we’ve watched the business quickly evolve from its ‘beachhead’ flexible pay tool proposition to a global fintech scale-up, bringing a broad range of financial wellbeing tools to over one million people and growing at an impressive scale. We are so proud of what the team continues to achieve – they are an undeniable proof that purpose-led vision and commercial scale go hand in hand.”
— Emma Steele, Partner at Ascension (which manages the Fair By Design fund)
