Fintech/News/

Wagestream raises $60m to take on the US — and usurp banks

The UK fintech talks acquisitions, international expansion and superapp ambitions

By Amy O'Brien

WageStream chief executive Peter Birffett

Wagestream began life as an “ethical alternative” to payday lenders in 2018, helping people tap into their salaries on demand. But its CEO Peter Briffett says the fintech is moving beyond this now crowded space and has much loftier ambitions — the S word. 

“Our offering at Wagestream has evolved to the whole concept of a financial superapp,” Briffett tells Sifted. 

The company has just raised $60m equity in a Series C round to do so, led by US-based Smash Capital, as well as BlackRock, Balderton, Northzone and charity fund Fair By Design. It’s also bagged $115m in debt financing from Silicon Valley Bank.

Wagestream has been growing rapidly. Revenues grew by 150% last year,  just over a million workers are using its app across 350 companies and it processes £3bn worth of their salaries. 

It’s also been busy with acquisitions and international expansion — something it intends to continue with this fresh capital. 

A global shopping spree

Wagestream is now looking to snap up other smaller fintechs in the UK and beyond, to enable its product’s superapp ambitions. 

“We’re actively interested in adjacent technology acquisition prospects in the UK,” Birffett tells Sifted. 

These won’t be its first acquisitions: as part of plans to expand further in east Asia, Wagestream acquired Sydney-based competitor Earnd in March last year, which will rebrand to Wagestream Australia.

Wagestream has also made some notable moves into emerging markets — it acquired stakes in Egypt’s Khazna this year, as well as Indonesia-based GajiGesa and India’s Refyne last year. Briffett tells Sifted he’s “excited” about these markets as they’re underserved by wage access products with millions of workers that Wagestream could tap into.

It also plans to expand further into the US — one of the reasons it chose a US-based fund to lead the round — where it already has serious traction; 250k workers, a quarter of everyone on Wagestream’s books, are US-based.

“It will be a fight out there because there is large competition, and buyers are much more educated in the space,” Briffett says — US companies like DailyPay, Earnin and ZayZoon were offering earned wage access years before any of Europe’s copycats cropped up.

“But ultimately, it comes down to product — no one else does savings products, no one else has a financial coach, no one else has the track feature. So all those things will bring people to us.” 

Beyond wages 

In the past couple of years, Wagestream has utilised open banking to expand its product offering beyond just salary on demand, so that workers can track all their spending in-app as well as having access to an on-demand financial coach.

It’s also launched a new savings product with the Co-op retail group in the UK, where 60k staff now get a healthy 5% savings rate on amounts that are deducted from their salaries.  

Coming up next are products to help people in the UK and the US save on their monthly bills, prompted by the “tsunami of financial issues coming down the line right now”.

Wagestream is working on in-app energy calculators, utilities services switching, broadband switching, phone bill switching, insurance switching, medical bill deposits and rental deposits.

“Frontline workers are never going to get a fair deal from banks”

Longer term, it wants to usurp banks as the go-to destination for users to manage all aspects of their financial lives.

“Frontline workers are never going to get a fair deal from banks, who see them as high risk and will only offer them some financial products at higher cost,” Birffett says. “What we’re trying to do is get the employer to be the provisioner of financial services to these workers, redistributing financial services away from banks to them.

“They’re much fairer — they’ve got a duty of care, they want their staff to have benefits but they don’t want to monetise it, whereas banks just want to take from them.”

For now, Wagestream plans to add all these services using adjacent providers, to get around the question of licensing. So far, Birffett tells Sifted, it has begun piloting a benefits entitlement checker powered by fintech Inbest and utilities switching powered by Youtility.

The golden ticket 

And it’s feeling smug for using wages as an entry into managing people’s entire financial lives.

“The important thing is that if someone enrols in Wagestream, their net pay passes through us before it hits Barclays or Natwest,” Birffett says. “That’s all a bank wants — net pay, right? It’s the golden ticket and it’s been the big challenge for neobanks like Monzo because they can’t get people to put their salary into their account.

“But it’s a core part of what we do as a business. We had salaries from the get-go. This means  we can provide a lot more of these really strong services now. We’re in a really privileged position.” 

Amy O’Brien is Sifted’s fintech reporter. She authors Sifted’s fintech newsletter and tweets from @Amy_EOBrien

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