It’s official: we raised an additional $175 million from Smash, BlackRock, and SVB.
But raising money is not the mark of success; using that money to create value for society is what matters.
The alchemy of impact
Medieval alchemists were obsessed with transforming lead into gold. Today, every child can point to the periodic table and explain why the alchemists failed. Alas, nobody can turn lead into gold, but we can turn a bit of gold into more gold. That’s the “magic” of impact investing – a small amount of capital can be multiplied into a large, measurable social good.
In its first four years, Wagestream raised $85 million, and as of today we’ve now given 1 million workers access to $4.7 billion of their hard-earned money. Our ratio of capital raised to liquidity released was 1:55. That’s modern-day impact alchemy.
And we believe we can do better. We’re aiming for a ratio of 1:100, meaning every $1 of capital raised by Wagestream will unlock $100 of impact for frontline workers. To understand how that is possible, it helps to look at the underlying sources of inequity in our modern financial system.
The unjust tax on frontline workers
Wagestream exists because of a single statistic. In January 2018, we both read on the FCA website how the average $325 payday loan ended up costing $538 to repay after interest, fees, and penalties. Disgusting. A few weeks later, we founded Wagestream to eradicate payday loans. (We got a bit obsessed, and even carried a coffin across the Thames to celebrate the death of a particularly heinous lender.)
We’re thrilled that we played our small part in the industry’s demise in the UK. But it turns out that payday loans were not the largest source of inequity – they were just the most visible.
The UK’s 9 million frontline workers are shouldering an annual “frontline tax” of $5.6 billion. This is how much more they are paying for goods and services than desk workers. The tax is $622 per person, per year, broken down into the following components:
The financial wellbeing superapp
The key technology that powers Wagestream is our integrations with time & attendance systems (102 and counting!). That’s how we provide real-time access to wages, and it’s also what will power our upcoming never-seen-before financial services. Imagine:
- Insurance that automatically adjusts your coverage & premium for variable pay;
- An app that monitors energy plans and automatically switches you to the optimal one;
- Fair credit, at fair APRs, that doesn’t punish those without a credit score;
- Rainy day funds that intelligently budget a few pennies from each shift you work, so that all of your monthly installments can automatically move to less expensive annual installments.
The Wagestream team is now hard at work on these features. More updates will come as we get closer to shipping, and as we secure the necessary regulatory approvals. (Hi 👋 FCA, and sorry for all the paperwork we’re about to drop on you!).
By the way, that team is growing and hiring. If you’re an engineer, designer, or financial services professional and would like to help out, here are our open roles. And if you don’t find a role on the website but you want to get involved, feel free to email us directly.
We are a UK headquartered company, inspired by a statistic on a UK government website, funded by the UK’s largest charities, and for the past four years have been focused on the UK’s 9 million frontline workers.
But the frontline tax isn’t a UK phenomenon. There are over 100 millions of frontline workers in the OECD countries, and with this fundraise we’re expanding our geographic footprint.
First up is the USA. We’ve opened our US HQ in Washington DC and are hiring dozens of roles. Check them out. And again, if you want to get involved but don’t see a precise fit, let us know.
And of course if you’re a US employer, and want to learn more about how you can offer Wagestream to your frontline workers, you can book a demo now.
I’d like to thank the academy…
Finally, a huge thank you to our new investors: Smash Capital, BlackRock Innovation and Growth Trust, and Silicon Valley Bank. We’re so thrilled to have them on this journey. They join existing investors Northzone, Balderton, QED, LocalGlobe, XYZ, Village Global, and Fair By Design in this round, which we believe marks the largest ever social impact fundraise in Europe.
And of course, we have to thank our clients and users. Your feedback and ideas make us constantly better, and we speak for the entire company when we say that the favorite part of our job is reading your reviews and learning a little more about how we can be helpful.
Enough from us; we’re getting back to work.
Peter Briffett, Co-founder, Wagestream
Portman Wills, Co-founder, Wagestream
 Based on research by the fabulous Personal Finance Research Center at the University of Bristol