London FinTech aiming to ‘destroy payday loans’ secures £15m
A London FinTech start-up which offers employees access to their next wage has secured £15m in funding.
Wagestream’s app allows employs to ‘pull down’ a percentage of their upcoming wage for a flat fee of £1.75.
This latest investment was co-led by venture capital investors Balderton Capital and Northzone.
Co-founded by Portman Wills and Peter Briffett in 2018, the app is designed to be an affordable alternative to payday loans, with a mission to “destroy the payday loan industry.”
The start-up also claims that its clients have seen up to a 40 per cent increase in staff retention as a result of using the app.
“Hopefully this is the start of a new wave of ‘social venturing’, where leading European VCs get behind tech businesses with a social purpose,” said Briffett of the investment.
“The antiquated monthly pay cycle inflicts huge financial damage on household finances and its days are numbered. Too many people are pushed into a corner by in-work poverty and forced into the hands of payday lenders and high-cost credit.”
Last year the start-up raised £4.5m from investors including Village Global, a VC backed by leading entrepreneurs, including Bill Gates and Jeff Bezos, taking the total raised to nearly £20m.
Its current clients include David Lloyd Clubs and Camden Town Brewery.
As part of its mission to put an end to payday loans, the start-up has also partnered with charities including Big Society Capital, in an effort reduce the ‘poverty premium’; additional charges faced by those most in need of financial services.
Last year the company led a ‘funeral procession’ in London in remembrance of the payday loan.