Investors pour $19 million into payday loan alternative Wagestream
A year after trying to save faltering payday lender Wonga, Balderton Capital is investing in the other side of the model by leading a $19 million Series A funding round in Wagestream, a U.K. startup that provides flexible payroll technology to avoid payday loans.
Balderton investment in Wagestream comes about one year after its investment in the failed U.K. fintech Wonga.
Wagestream, whose clients include Camden Town Brewery, provides an early wage advance for consumers when they can't meet their financial obligations. In the U.S., companies such as PayActiv provide a similar product.
The Wagestream app is already being used by about 115,000 workers, reports the Evening Standard. The service costs a flat fee of £1.75 per transaction. Employers pay a £1 fee per worker using the service. The new Wagestream investment also includes Northzone.
Wagestream has raised £44.5 million (about US$56.6 million) in debt and equity funding over three rounds since 2018, according to Crunchbase. In its first round of funding, it attracted an investment from Village Capital, the San Francisco-based venture capital firm that counts Bill Gates, Jeff Bezos and Mark Zuckerberg among its principal investors.