At present, many fintech startups are working on reforming the payday lending industry. For low wage earners, budgeting can be complex when income and bills are farther apart. There are few in the industry, who prey on the desperation of people by lending short-term loans with extremely high interest, forcing the customer into a deep pit of debt.
Largest social impact investment
That said, London-based Wagestream is working on an approach to close the gap between income and consumption needs, with a new method. Recently, Wagestream, which campaigns against payday poverty has secured the largest social impact investment ever in the UK. Reportedly, Wagestream is backed by tech figureheads such as Jeff Bezos and Mark Zuckerberg.
Secured €46 million funding
The financial wellbeing app has recently closed a Series A round of £40 million (€46 million). The funding round includes £15m (approx €17 million) from Balderton and Northzone and £25m (approx €28 million) from specialist savings and lending bank Shawbrook. Other investors in the round include QED, the Rowntree Foundation, the London Co-investment Fund (LCIF) and Village Global, a social venture firm backed by Bill Gates and Jeff Bezos, among others.
Peter Briffett, CEO and Co-Founder, Wagestream:
Wagestream is at the point of scaling up rapidly and this historic investment is going to accelerate the pace at which companies across the country liberate their staff from payday poverty and the disastrous social consequences that stem from it.
So, how does it work?
For the uninitiated, Wagestream is a financial services firm that allows employees to stream their earned wages into their accounts whenever they need it through a simple, instant app. The app provides a library of expert tools, tips, articles and advice for employees through as well.
Founded by Peter Briffett and Portman Wills, this platform allows staff to draw down a percentage of their earned wages any time for a flat fee of £1.75 – with no loans or interest.