Wagestream backed by Microsoft and Amazon founders
Written by Hannah McGrath
Wagestream has landed the backing of major tech investors including Bill Gates, the founder of Microsoft, and Jeff Bezos, chief executive of Amazon.
The payroll finance app, which hopes to help firms end the payday poverty cycle by allowing employees to access their wages before payday, has raised £4.5 million in its latest funding round.
It offers an alternative to overdrafts, credit card balances and payday loans via a “get-paid as you-go” platform for a flat fee of £1.75, with the total taken from the salary on payday.
The firm claims the service can be implemented by companies without impacting cash-flow, payroll or timekeeping processes, and provides financial security to UK workers.
Wagestream has trialled the platform with more than 20 businesses so far, employing a total of more than 20,000 people.
The startup claims its platform has led to a 10 per cent increase in staff retention, a 20 per cent improvement in productivity and a 100 per cent increase in job applicants when a company holds Wagestream accreditation.
News of the investment follows the collapse of controversial payday lender Wonga, which went into administration on August 30 following a series of high profile campaigns over the impact of crippling interest charges on loans.
The funding round for Wagestream was led by Village, a global venture capital firm backed by leading entrepreneurs including Bezos and Gates.
Other investors include QED investors, the London Mayor’s Co-Investment Fund and Fair By Design.
Peter Briffett, chief executive and co-founder of Wagestream, said: “For far too long legal loan sharks have been exploiting the most disadvantaged consumers with crippling high-cost loans. By giving workers access to their earnings, they can prevent themselves from going into overdraft, credit card debt or the worst case, applying for a payday loan.
He added: “At Wagestream we give people access to their earned income when they need it, without the need for employers to alter their usual payroll frequency.”