Wagestream has completed a £20 million Series B funding round.

Early-stage venture capital specialist Northzone led the round, with participation from QED Investors, Latitude Ventures and Balderton Capital. This latest investment - which takes the total raised to £65 million - will be used to consolidate the company’s market share in the UK and fund its international expansion.

Wagestream’s earlier stage investors include The Joseph Rowntree Foundation through the Fair By Design Fund, the London Co-investment Fund and Village Global.

The British FinTech startup, which enables staff to draw down a percentage of their earned wages any day of the month for a flat £1.75 fee, has seen demand for its product increase significantly among major UK brands over the past year.

New client sign-ups were particularly strong in the second quarter - including Honest Burgers, SA Brain, Fuller’s and two NHS trusts - as employers sought to make their staff more financially resilient in the face of COVID-19.

Through its Safestream savings product, Wagestream also enables users to put aside a small amount of their pay before it is paid to them.

Co-founder and chief executive Peter Briffett commented: “Income streaming is a fast-growing alternative to the antiquated monthly pay cycle, and is being embraced by more brands, charities and organisations by the day as it boosts employees’ financial resilience.

"Each day, too many staff in too many companies are being forced into the hands of predatory payday lenders because they are only paid their earnings once every 30 days, enabling people to access their earned wages anytime keeps them out of debt and also incentivises them to do more shifts because they are motivated by the ability to use that extra income immediately to make specific purchases.”

Rob Moffat, a partner at Balderton Capital, said: "Wagestream has gone from strength to strength since the last round and so, for us, doubling down was an easy decision to make - the feedback from employers and employees alike is positive across the board and the number of companies adopting this way of paying their staff has now passed that all-important tipping point.”

Jonathan Levy, investment portfolio manager at the Joseph Rowntree Foundation, added: “Financial inclusion tools that reduce the poverty premium and help prevent those on low-incomes from relying on credit due to the painful effects of the monthly pay cycle are going to be essential post-pandemic if these workers are to avoid a vicious cycle of debt.”

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