The collapse of Greensill, the hyped trade finance company backed by Japanese investor Softbank, has been a disaster for companies worldwide. But there's a silver lining for Wagestream, a rising UK fintech, which has bagged one of Greensill's key subsidiaries from its administrators.
Wagestream, which gives workers early access to wages, has scooped up Earnd Australia, a Sydney-based competitor that Greensill acquired just last year.
Earnd is reported to be "among only a handful of 'hard assets'” that Greensill's administrator can sell and is hence one of the top tickets, albeit last priced at just A$20m.
Greensill's administrators, Grant Thornton, were recruited a fortnight ago to help creditors access some of the $1.5bn in outstanding funds. Top of Greensill's creditor list is its main investor, Softbank.
Wagestream chief executive Peter Briffett told Sifted the acquisition of Earnd's Australian division had come after a whirlwind fortnight.
"It happened very quickly... we got in touch with administrators... We were really interested," he said.
Briffett also explained the acquisition fed into Wagestream's efforts to expand 'down under', helping "save a lot of time and effort."
Wagestream — which has raised £65m in total from the likes of Balderton and Northzone — had only just begun efforts in Australia prior to the purchase, with just one employee on the ground.
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The fintech will now absorb Earnd's 14-person Sydney team, as well as its established client-base, accessing tens of thousands of workers via partnerships with employers like JD Sport.
Briffett declined to comment on how much Wagestream paid for Earnd's Australian division (Earnd's UK and US entities are being liquidated).
Greensill's administrators did not reply to a request for comment.
An opportunistic buy
Wagestream and Earnd both provide salary-on-demand or 'earned wage access' (EWA).
The platforms give workers regular access to their wage packets, rather than once a month. Moreover, the payments are not categorised as 'credit' because the employee has already banked the earnings.
Australia offers an attractive new market, Briffett says, as it's seeing growing competition in this space.
"They're just slightly behind us [in the UK]...They're at the end at the early adoption stage", he said, adding that this EWA was now "mass market" in the US.
Founded in 2018, Earnd is Australia's market leader, but Briffett said the purchase wasn't about taking out the competition.
"They've been going for three years. They're the perfect fit. They've got a great team and a great leader," he said.
While Briffett declined to comment on Earnd's revenue, he said that their growth rate was "brilliant."
The startup also had a slightly different model to Wagestream's. Wagestream charges workers a small fee every time they draw down their salaries early, whereas Earnd charges employers a SaaS fee.
EWA startups promise employers higher retention rates, more overtime take-up and better financial wellbeing.
The question now is whether Wagestream can seamlessly integrate Earnd's team, who are a key part of the acquisition.
Briffet said Earnd was "massively positive" about the acquisition, having had a "turbulent time" with Greensill's downfall. He added the two sets of management were "completely aligned,' and that Earnd founder Josh Vernon would lead the new venture.
Expanding into Australia is Wagestream's first step to moving into the wider APAC region, accelerating its mission to be "a global leader in wellness tools."
It's the latest in a string of European fintechs to go to Australia. Others include trading app Freetrade, banking-as-a-service platform Railsbank, and Klarna.