Wagestream, which helps employees get early access to earned wages, has raised £20m in its Series B as it seeks international expansion.
The round was led by early-stage venture capital firm Northzone. The venture firm has raised more than £1.4bn for its funds and has backed over 150 companies including Spotify, Zopa and Trustpilot.
Other contributions to Wagestream’s Series B include QED Investors, Latitude Ventures and Balderton Capital.
Existing Wagestream backers also joined the round, including the Joseph Rowntree Foundation through the Fair By Design Fund, the London Co-investment Fund (LCIF) and Village Global.
Village Global is a venture capital firm backed by entrepreneurs including Bill Gates and Jeff Bezos.
UK-based Wagestream allows staff to access a percentage of their earned wages any day in a month for a flat fee of £1.75. The company claims there was a strong client sign-up in the second quarter of 2020 as companies aim to make staff more financially stable during the coronavirus pandemic.
With real-time access to wages, employees can forgo the need of short-term loans.
Some of the latest clients of Wagestream include Honest Burgers, SA Brain, Fuller’s and two NHS trusts.
Wagestream CEO and co-founder Peter Briffett said, “Where people work and how they work is changing by the day, all the more so since Covid-19 struck. Now the way in which people get paid is changing, too, and at scale. Wagestream provides a financial flexibility that is perfectly suited to today’s agile and progressive workforce.”
The company claims that employees using the Wagestream solution have better flexibility and security, increasing their loyalty. It also claims that shift workers choose to work 22% more hours on average once enrolled in Wagestream.
Research from the company also claims that 77% of users feel less stressed, 38% avoid going into overdraft and 43% avoid payday loans.
QED Investors managing partner and co-founder Nigel Morris said, “While the pace of innovation and change is only going to accelerate in a post-Covid world, today, there is still vast financial and economic inequality across the globe.
“Wagestream’s mission of providing a way for workers to access their earned wages when they need it is more essential now than ever. Being in the vanguard of such a crucial endeavor, Wagestream is poised for tremendous growth and will continue to deliver enormous value as the world emerges from this crisis. The service is worker-centric making it indispensable for progressive employers.”
Wagestream previously raised £4.5m in funding from investors including Bill Gates and Jeff Bezos.
Earlier in the month, Wagestream partnered with business process as a service solution developer OneSource Virtual. The deal sees them create myFlexPay, which will help more employees access earned wages, improve financial education and improve visibility into earnings.
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