Wagestream, a U.K.-based financial technology company, has raised $60 million in new funding to launch its services for U.S. customers. This new funding round puts Wagestream’s total valuation at more than $450 million, making the company one of the most valuable fintech startups of 2020. The funds will be used to establish Wagestream’s presence in the United States, with goals including expanding its platform and partnering with key banking institutions to deploy its financial products and services to US customers quickly and securely.
Wagestream aims to revolutionize how people are paid, providing employees access to their earned wages on demand rather than waiting two weeks or more for a paycheck. Its flagship product allows employees to get paid instantly with the simplicity of an everyday online payment — now completely free — while employers save time and money by automating the payroll process and streamlining manual employee checks into an easy-to-use online portal. In addition, this access gives employees much greater control over their money, allowing them to make informed decisions about how they spend their income before their next payday arrives.
With this new funding round, Wagestream is positioning itself as a company that empowers users worldwide by giving them immediate access to earned wages whenever needed—without incurring interest costs or making risky decisions about payday loans. In addition, by partnering with banks across the US—rather than competing against them—Wagestream aims to provide all users easier access to reach their fiscal goals faster without the added stress that often comes with managing finances between paychecks.
Overview of Wagestream
Wagestream is a financial technology company revolutionizing how people receive and manage their paycheck. The company recently raised $60m in a Series B funding round, giving it the capital needed to launch in the US and challenge banks for payroll services.
In this article, we’ll take a closer look at what Wagestream does, why its growing in popularity, and how it could revolutionize how people receive and manage their income.
History and background
Wagestream is a London-based FinTech startup that provides an app-based solution to workers in the United States, helping them access their earned wages more frequently than is possible with traditional models. It also helps people save money and manage their finances better.
Founded by Peter Briffett, Flora Wasserman, Tominy Willson and Hugo Verreycken in 2016, Wagestream raised just $1.2 million in seed funding through European investors before its first UK launch in 2018. However, Wagestream experienced significant traction since its beginning stages, expanding to seven countries across Europe in early 2019 with more partners coming onboard every month. With over half a million users and 20 strategic partnerships formed by the end of 2020, Wagestream has revolutionized how people manage their finances by giving them money when they need it most.
The company makes money from employers through platform access fees and interest accrued from installments provided on payday or shortly after that. In a furthering effort to gain traction with employers and employees in the US Markets, Wagestream recently announced a whopping $60M Series B raise on August 10th 2020 — one of the largest for any fundraising for UK Fintechs during 2020 thus far — making it well positioned to be one of those most sought after players pushing boundaries in the workplace financial health space.
In addition to providing users with vital financial insights and improved early wage access functionality; This funds realized will help entrench members within both stateside banking platforms & major US retailers networks – including Walmart – further superioriating its proposition within this segment where traditional banks are struggling (or failing) to match OR compete effectively against these new increasingly user friendly solutions.
Goals and objectives
With this significant capital raise, Wagestream has set itself the ambitious task of becoming a leading financial health provider in the US — an aspiration ultimately meant to improve working people’s financial health and replace banks. To do this, they will focus on developing their highly secure technology-driven payroll services, debt management tools and budgeting support that empower employees to become more financially secure.
The success of this venture will be measured not just through its funding goals, but in providing customers with comprehensive online platforms that aggregate data sets across income streams and are integrated with banks accounts. This includes a ‘smart’ budgeting tool that enables working people to easily understand where their money is going so they can make strategic decisions. Through putting their customers first and making information about financial health more accessible, Wagestream wants to be considered an ally for the workplace bank account sector — helping working people save money quickly and efficiently, even during tough times.
Moreover, by partnering with existing US-based banks such as Bank of America, Wells Fargo and JP Morgan Chase & Co., as well as local credit unions across the States, anyone will have access to the services offered by Wagestream.
Wagestream raises $60m to take on the US — and usurp banks
Wagestream, a financial technology company, recently raised $60 million in Series B funding. This financing round was led by the venture capital firms Life Sciences Partners (LSP) and Draper Esprit, allowing Wagestream to expand its US presence.
The company aims to provide a product that makes it easier for customers to receive their wages anytime and helps them better manage their finances.
Let’s take a look at Wagestream’s fundraising and the implications it may have for banks.
Amount raised
Wagestream, an employee financial wellness platform, has raised $60 million in Series B funding to expand its business in the United States. This new round of funding was led by Index Ventures and also included LocalGlobe, Draper Esprit, Axel Springer Digital Ventures, Speedinvest and South Africa-based EOS Venture Partners. The total amount raised since launch now exceeds $90 million.
This latest round of funding will enable Wagestream to launch its employee financial wellness platform in the US. The company has stated that it will use these funds to increase hires and expand its product capabilities into new US and international markets. In addition, these funds will be used towards expanding awareness around its app-based platform which focuses on helping employees gain greater access to their income between paydays.
The success of Wagestream’s fundraising demonstrates the potential of this new wave of disruptors taking on traditional structures such as banks and payroll providers. This news highlights how organisations recognize the potential value of direct access to funds before paydays. Wagestream currently supports millions of employees worldwide with access to their earned wages when needed most throughout their finances each month via employers partnerships across Europe Ireland, France and South Africa as well as now venturing into the US market with this fundraise allowing for more American consumers having this kind of convenience available – challenging traditional banking practices.
Investors
Wagestream has successfully raised $60 million, led by existing investors DSW, Octopus Ventures and Zouk Capital. The tech company is blazing a trail in the US with the latest collection of funds. The investment values Wagestream at more than $130 million, making it the fastest-growing stream automation platform tackling “payroll debt” — whereby many Americans cannot pay bills and wages due to personal debt challenges.
The announcement came after Wagestream closed two initial funding rounds from investors including Visa, Techstars and Refresh Investments in 2019. The additional funding will help expand its presence across the US, providing flexible access to employee pay for 110+ companies (and growing) with more than one million employees.
Wagestream’s new US expansion strategy stands to revolutionize big banks and take control over their payroll models. This will allow employees to access their pay when needed while also allowing employers to offer unique benefits and loyalty programs beyond traditional payroll solutions.
The investor group includes venture capitalists such as LocalGlobe, Fin VC and Balderton Capital, and tech entrepreneur Nick Wheeler from Charles Tyrwhitt (CT), who personally participated in this fundraising round. Other key partners include Mastercard Start Path, Drakewell Ventures and Cocoon Capita.
Impact of the fundraising
The impact of Wagestream’s recent fundraising efforts cannot be overstated. With $60 million in additional funds, the London and Dublin-based fintech is demonstrating its ambition to challenge traditional banking models in the United States and Europe. In addition, the money will expedite the company’s plans to expand across Europe and into North America, increase its workforce size, and launch new products to “shake up how people manage their money”.
Wagestream works with employers, who pay into the platform each month on behalf of all of their employees. Employee can then access this money without any fees or interest for a specified amount — usually based on that month’s salary earned — allowing them to have quick access to cash when needed outside regular monthly payments.
Wagestream’s fundraising also drew attention from investors who specialize in venture capital during a critical time when COVID-19 is causing financial hardship for consumers who are already living paycheck-to-paycheck or facing large unexpected expenses.
Investors recognized the innovative solutions Wagestream provides and its ability to help individuals gain more control over their finances while giving employers a tool to empower their employees during these difficult times.
Beyond helping financially burdened workers, Wagestream has ambitions to transcend traditional banks by becoming a complete alternative financial services system that also helps savers save more efficiently using modern technology like artificial intelligence (AI). The company will use its newly acquired resources to further develop this system. It is expected to reduce costs for everyone involved in banking transactions, from consumers and employers down the banks. Wagestream’s CEO said this recent fundraising round puts them well on their way towards establishing themselves as a global competitive leader in financial services for decades ahead.
Impact on the US Banks
Wagestream recently raised $60m in a funding round that will allow them to expand into the US market. This move could potentially have a huge impact on the US banks.
Wagestream is a financial technology company that provides an alternative to traditional payroll services by providing workers with access to earned wages whenever needed. By providing a more convenient and cost-effective way to access wages, Wagestream could potentially disrupt the traditional payroll system in the US.
This article will explore the potential implications of Wagestream’s move on the US banks.
Challenges posed by Wagestream
Wagestream, an app that allows employees to access their earned wages as they’re paid, recently announced it had successfully raised $60m in venture capital to take on the US markets. With faster access to earnings via the app, which also provides an in-app savings feature of up to 10 percent of a user’s salary and the potential of reimbursements for health expenses, Wagestream poses significant challenges to traditional banks.
The funding could enable Wagestream to expand its services into new financial segments such as loans and credit cards. This could accelerate a shift towards solutions that offer users more control over their finances than is currently available within traditional banking models.
Wagestream might also disrupt traditional banking payroll structures by providing customers greater control of their wages with instant access. The app may also increase competition from other providers offering similar finance solutions. It will be important for banks and other financial institutions to stay ahead of these developments to remain competitive.
Additionally, Wagestream’s emphasis on verified salaried workers instead of unaffiliated freelancers presents both risk and opportunity for banks and other financial service providers. Unaffiliated freelancers may be less desirable customers due the transient nature of their cash flow and necessitate more rigorous risk assessments before any loans offered or products purchased by them on behalf of lenders or providers. Nevertheless, this segment has long been avoided but presents opportunities due its size since many self-employed individuals seek financing options from community banks and credit unions.
Advantages of Wagestream over banks
Wagestream, a London-based FinTech company, has announced the close of a $60 million round of funding to expand its presence in the US. The financing round was led by Sapphire Ventures and includes participation from renowed investors such as IDB Investments, e.ventures, Instant Growth and Great Point Ventures. The new capital raise enables Wagestream to extend its financial wellness platform to the US market and provides an opportunity for banking partners and employers to empower their employees with an alternative way of accessing earned wages.
The Wagestream platform offers banking partners and employers in the US an innovative way to provide financial security to their users by giving them real-time access to their earnings instead of waiting for a weekly paycheck. This method allows users to manage their income more effectively without additional costs or hidden tricks. In addition, this type of service empowers users to break up their wages into smaller amounts and with greater flexibility and peace-of-mind knowing they have access to their funds when they need it most.
This new funding will enable Wagestream’s US team to build upon current successes in Europe, including partnerships with large banks such as HSBC, Nationwide Building Society, UBS Switzerland, Danske Bank Denmark, among many others. This capital raise further positions Wagestream as a major disruptor in the financial services industry providing an innovative way for people worldwide to gain greater control over how they access their earnings effortlessly and safely. Importantly for banks, this creates an opportunity for them not only add value for customers through bank accounts but also increase engagement, loyalty & revenues via new lines of business & services that are heavily regulated today.
Conclusion
In conclusion, Wagestream’s new fundraising effort highlights a wave of technology-enabled alternatives for consumers who want more power and control over their finances. The team’s innovative approach is intended to revolutionize how workers access their wages and capital, allowing them to make critical payments and save money more easily. By targeting American and UK banks, they also position themselves as a major player in their financial services marketplaces.
Wagestream’s $60 million fund raise reflects their ambition to upset the “banking as usual” status quo in the US with their innovative app-based service. With a modern platform that focuses on empowering users rather than traditional banking structures, Wagestream offers individuals and businesses alike an alternative savings experience that saves money and makes managing finances effortless. Going forward, it will be interesting to see how well Wagestream can compete in an increasingly digital banking environment — one that will likely become even more difficult for traditional lenders as more disruptive financial services join the market.
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