Wagestream raises $175M to expand its financial app for frontline workers

Wagestream raises $175M to expand its financial app for frontline workers

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U.K.-based startup Wagestream Ltd. today announced that it has secured $175 million in new financing to expand adoption of its financial app for frontline workers, which already has more than one million users.

The financing includes a $60 million equity investment and $115 million in debt financing. The equity investment was led by Smash Capital and BlackRock. Silicon Valley Bank, meanwhile, is providing the debt financing.

Wagestream provides a financial app designed for frontline workers in industries such as the retail, hospitality and healthcare sectors. Companies can use the app to let staffers access up to 50% of their accrued wages before payday. According to Wagestream, Burger King Corp., Pizza Hut Inc. and other companies have made its app available to more than one million workers worldwide. 

The startup offers multiple financial tools as part of its feature set. A built-in savings tool enables workers to set a savings goal, specify the time frame in which the goal should be met and have Wagestream automatically calculate the necessary monthly contribution. The startup also automates the process of setting aside the monthly contribution.

Wagestream says that making its app available to staffers helps companies increase employee retention. Organizations can reduce staff churn by 16% within less than a year of rolling out its app, the startup claims. 

According to Wagestream, providing financial tools to workers also makes it possible to streamline a company’s recruiting efforts. Organizations can offer the startup’s app as an employee benefit to more easily recruit new hires. Wagestream provides a feature that enables companies to subsidize certain transaction fees for workers as a way of further enhancing the value proposition.  

Wagestream targets its app at both enterprises and small businesses. It has also a presence in the public sector: the U.K.’s National Health Service offers the startup’s app to workers. 

Most of Wagestream’s users are currently in the U.K. The startup will use its newly raised financing to expand its presence in the U.S., where it currently has an installed base of 250,000 workers. Wagestream says that the U.S. is already its fastest growing market.

Wagestream will use a part of its newly raised funding to develop more capabilities for its app. The company plans to roll out insurance and lending features, as well as a new budgeting capability. 

“When we launched Wagestream, many employers viewed financial wellbeing in the workplace as a long-term aspiration; now they realize it is an emergency,” said Wagestream co-founder and Chief Executive Officer Peter Briffett. “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.”

Financial technology startups have raised more than $1 billion in funding over the last few weeks alone, according to Crunchbase research. The fintech industry drew more venture funding than any other segment of the startup ecosystem last year, with the combined value of investments jumping 177% in 2021 to a total of $134 billion. 

Image: Wagestream

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