TechCrunch+ roundup: Growth activation metrics, 3 keys to Series B, pitch deck teardown

In his latest TC+ post, growth expert Jonathan Martinez looks at the grim realities of user acquisition. The plain fact is, few people who are motivated enough to make it all the way through a registration flow ever create any value.

“Approximately 95.87% of iOS users drop off after day 30,” writes Martinez. “As a startup founder, how do you prevent leakage after spending significant resources to acquire people at the top of the funnel?”

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For starters, product teams need to identify optimal activation metrics that spotlight the right users — the ones who find utility and delight in your offerings.

“This can be platform-usage minutes, the number of messages a user sends, how many people a user follows, the number of times a user personalizes their avatar, or anything that provides a signal on how users are finding value in your product.”

The investors I’ve spoken to recently are still open to good ideas, but when they come from founders who are already working toward product-market fit, it boosts their confidence.

The small improvements you make by tweaking onboarding processes or fine-tuning lifecycle emails could help you close your next round.

Thanks very much for reading,

Walter Thompson
Editorial Manager, TechCrunch+

3 investors explain why earned wage access startups are set to cash more checks

hand holding a money bag

Image Credits: Liia Galimzianova (opens in a new window) / Getty Images

Workers with low-wage jobs often experience cash-flow problems.

Because so many don’t have access to credit or savings, a growing number that once depended on predatory lenders can now tap into their wages before payday via earned wage access (EWA).

“The potential for this model is huge, but the industry is still very much in its early stages,” reports Karan Bhasin, who interviewed three active EWA investors to learn more about where the industry is headed:

  • Jennifer Ho, partner, Integra Partners
  • Aris Xenofontos, partner, Seaya Ventures
  • Aditi Maliwal, partner, Upfront Ventures

Dear Sophie: Is there a way to keep working in the US after my J-1 visa expires?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I’m a Fulbright Scholar on a J-1 visa. I’ve been told that after my J-1 ends, I’m required to return to my country for two years.

Is there a way I can stay in the U.S.? Can I apply for an O-1A or green card even if I have to go back to my country?

— Seeking to Stay

Getting serious about Series B: 3 documents that help founders control the narrative

Neapolitan ice cream. Shallow DOF.

Image Credits: davidf (opens in a new window) / Getty Images

Investors who have an entrepreneurial background possess unique insights into the fundraising process, so we have two posts by Gaetano Crupi, a partner at VC firm Prime Movers Lab.

Crupi has spent the pandemic era supporting Series B startups, so he shared an article that examines how a strategy memo, a pitch deck and a forecast model work in tandem to steer potential investors through diligence.

“This is a great way to control the narrative and ensure that what you want to be transmitted is received by the other parties.”

Pitch Deck Teardown:’s $9.8M Series A deck

Helping small- and medium-sized enterprises with their controlling, reporting and budgeting may not sound exciting, but Austrian fintech startup’s storytelling skills excited investors enough to help it raise a $9.8 million Series A in July.

With the exception of some details regarding unit economics and revenue, Helu shared its entire winning pitch deck with us. As these slides suggest, its founders took a straightforward approach:

  • Problem: “The CFO’s pain is Excel”
  • Solution: “Good-bye Excel sheets”

TechCrunch+ roundup: Growth activation metrics, 3 keys to Series B, pitch deck teardown by Walter Thompson originally published on TechCrunch

3 investors explain why earned wage access startups are set to cash more checks

It always feels good to get paid, so it’s no surprise that a payroll model like earned wage access (EWA), which lets employees withdraw their accrued wages at any time, has exploded in popularity.

The pandemic certainly played a big role in helping people understand the benefits of being able to treat their accrued salaries like a small bank account. While wage advances and payday loans have been around for much longer, they serve a very different purpose. With EWA, since you’re only accessing money you’ve already earned, there’s no risk of accumulating debt, and workers can better manage their finances.

The potential for this model is huge, but the industry is still very much in its early stages. Several countries don’t yet have an EWA provider, and in most others, providers are still taking their first steps.

Jennifer Ho, partner at Integra Partners, is confident that the EWA industry is going to keep growing after positive early interest. “In 2021, over $1.13 billion was raised by startups offering EWA products. Due to changing lifestyles, rising costs of living and the residual impact of COVID-19, many small and medium-sized enterprises have grown dependent on EWA,” she said.

That’s not to say there aren’t some issues. Most EWA providers are still experimenting to find out what works, and the business models vary widely, which is a symptom of an industry trying to find its footing. Two of the more prominent models involve either charging the employer a flat fee or charging employees per transaction.

Aris Xenofontos, partner at Seaya, believes an employer-paid model is the way to go for two reasons: social impact and long-term viability. “From a social impact perspective, would you want the party that needs the money the most, the employee, to pay for the services? And from a long-term viability perspective, offering the service for free to employees helps drive better adoption — often 2x-3x the adoption you get when employees pay per transaction,” he said.

“EWA companies are typically B2B2C businesses and face the same challenges that many B2B2C businesses face: The decision-maker and the consumer have different incentives and priorities.” Jennifer Ho, partner, Integra Partners

“Taking into account that the purely EWA business model is not among the strongest in the fintech world, choosing the model that helps drive better adoption leads to more cross-selling opportunities, and eventually, better economics.”

To get a more in-depth look at the state of the EWA industry, how it should be classified and where the money is going, we spoke to a few active investors in the space:

EWA is already prevalent in the U.S. in industries such as retail and fast food, so how difficult will it be for startups to bring the technology to new sectors? Which sectors are the most ripe, and which ones offer the most resistance?

Jennifer: EWA works in any sector where wages are not paid instantly, and it works best when they can serve large pools of financially underserved employees. The less savings people have to finance their day-to-day ahead of wage disbursement, the more valuable EWA becomes.

In developed markets, this typically means sectors that have a large blue-collar workforce. However, in emerging markets like Southeast Asia, where financial literacy remains relatively low, and large segments of the middle class remain financially underserved, EWA can have a far broader impact.

Aris: We have been observing recently a penetration of EWA in two dimensions: vertically and horizontally.

From a vertical perspective, retail and fast food are indeed some of the first ones to come to mind, but other sectors are seeing growing penetration as well. Especially those where the headcount is blue collar dominated, such as manufacturing and transport.

From a horizontal perspective, we see EWA penetrating nearly every sector at the lower compensation/entry-level employees point. This is for sectors where the proportion of permanent full-time employees is high.

We believe the cost of living crisis that started in 2022 and will presumably last for some time is likely to promote this horizontal penetration.

Aditi: The best way to roll out EWA to new sectors is by distributing through payroll providers. One sector where EWA is viewed favorably is the nursing/medical industry.

Earned wage access is still a fairly new service, and we see multiple models, with some charging employers and others charging employees. Which earned wage access model is the strongest? Why?

Jennifer: From a financial inclusion perspective, models where the employer — rather than the employee — bears the cost have the stronger social impact case. What we’ve found is that EWA startups typically service a mix of customers across both models, where the employer pays in some cases and the employee pays in others.

3 investors explain why earned wage access startups are set to cash more checks by Karan Bhasin originally published on TechCrunch

Is earned wage access ushering in a new era of payroll management?

Payroll is one area of business that’s been ripe for innovation and disruption for a while now. On the surface, it may not look like something that really requires any major changes. After all, it’s worked well enough so far: You work your hours and you get paid every fortnight or month. The machines kept ticking without a lot of complaints despite the current system not being entirely ideal for the large part of the population that lives paycheck to paycheck.

Earned wage access promises to be the shakeup that the payroll system has perhaps required for a while now. The premise is simple: EWA providers posit that the workforce should be paid on demand, and a good portion of the workforce agrees with that.

To find out just how well the industry has embraced this payroll model and the startups championing it, we spoke to three investors, and they painted a picture of a fast-growing industry that’s still trying to find its footing.

Jennifer Ho, partner at Integra Partners, pointed out: “In 2021, over $1.13 billion was raised by startups offering EWA products. Due to changing lifestyles, rising costs of living, and the residual impact of COVID-19, many small and medium-sized enterprises have grown dependent on EWA. Particularly in Asia, EWA has picked up steam this year.”

But there is a significant number of hurdles that EWA startups will have to surmount to earn the trust of employers and employees alike, Ho said. “It is important to remember that EWA companies are typically B2B2C businesses, and face the same challenges that many B2B2C businesses face: the decision-maker and the consumer have different incentives and priorities.”

Despite a few different EWA models seeing varying success at the moment, Ho believes the model that places the cost on the employer is the one that will win.

“From a financial inclusion perspective, models where the employer — rather than the employee — bears the cost have the stronger social impact case. What we’ve found is that EWA startups typically service a mix of customers across both models, where the employer pays in some cases and the employee pays in others. Broadly speaking, an EWA startup’s goal is to prove its value as an employee welfare and retention tool. For accounts that start on an employee-pays model, employers will get a better understanding of how EWA improves employee productivity and retention over time. This will be a key driver for encouraging employers to pay for a fixed fee per disbursement, ultimately facilitating the transition of the account to an employer-pay model.”

Despite concerns that the EWA technology is replicable, Aris Xenofontos, partner at Seaya, is of the belief that EWA is a defensible business model because the moving parts are complex enough to deter corporations from coming up with their own solutions.

“The technology is evidently replicable. However, the pain of integrating with the various payroll systems, and the lending/balance sheet side of the business, makes it hard for a larger company to do this in-house. We don’t see in-house development as a big competitor here.”

Read the full survey to learn which sectors earned wage access is most popular in, what investors look for in an EWA startup, and the best way to pitch them.

Is earned wage access ushering in a new era of payroll management? by Karan Bhasin originally published on TechCrunch

ZayZoon charges employees $5 to get paid sooner

In spite of the so-called Great Resignation, wages haven’t risen as dramatically as some economists anticipated. About 41% of workers recently surveyed by Willis Towers Watson say that they’re living paycheck to paycheck, while the Bureau of Economic Advisers reports that personal savings rates reached a seven-year low in April — reflecting the dire financial situation many workers find themselves in.

Tate Hackert, the CEO of Calgary-based ZayZoon, asserts inflexible pay schedules are a major contributor to the inequity. That’s one of the reasons he founded ZayZoon, he says — so that workers can access pay when bills come due rather than on a fixed schedule.

To grow the business, ZayZoon today closed a $12.5 million funding round co-led by Carpe Diem Investments and Alpenglow Capital with participation from InterGen Capital, Prairie Merchant Corporation, and several angel investors. Alongside a $13 million loan from ATB Financial, the proceeds bring ZayZoon’s total raised capital to date to $25 million.

“Saving every penny I made, at the age of 16, I provided mortgage financing to a family friend in return for interest payments,” Hackert told TechCrunch in an email interview. “The same patterns emerged — people with relatively [good] incomes that needed a small amount of capital for a small amount of time just to get by … I sought out to create a product that could help employees in their most vulnerable moments, while staying socially responsible and true to a mission of improving their overall financial health.”

ZayZoon’s platform allows small- and medium-sized businesses to implement what’s known as an earned wage access (EWA) program. EWA gives employees access to some of their accrued wages before the end of their payroll cycle. Workers still receive the entirety of their paycheck at the end of each cycle. However, the advancements made are subtracted from the direct deposit account.

ZayZoon funds early wage requests itself to mitigate risk on the employer side. The service is free for companies to use, but ZayZoon charges workers a $5 fee to choose how much of their wages they’d like to access (up to $200). Companies can opt — but aren’t required — to subsidize the benefit.

Funding requests are disbursed “within minutes” to employees’ accounts, or workers can sign up for a ZayZoon-branded Visa card that acts like a prepaid debit card. Whether or not they decide to go the prepaid route, workers can link ZayZoon to their bank accounts for spending insights in addition to alerts of overdraft and minimum account balance fees.

“Employers assume implementing an EWA program takes immense effort, but ZayZoon can fully activate a business in less than 1 hour, with the majority taking less than a few minutes,” Hackert said. “Over 3,000 businesses offer ZayZoon to their staff today … Depending on the industry and employee demographics, it’s typical for a business that rolls out ZayZoon to have 25% to 45% of their workforce accessing ZayZoon regularly.”

ZayZoon claims that Sonic, McDonald’s, Domino’s, and Hilton franchisees are among its customers.

ZayZoon is a part of a massive industry, to be sure, with research firm Aite-Novarica Group estimating that EWA providers moved about $9.5 billion in pay in 2020. India’s Refyne raised $82 million to do so in January, while platforms like Branch, DailyPay, and Even have secured hundreds of millions of dollars for their EWA services.

But in spite of VC cash and endorsements from big-name brands like Uber, Lyft, and Walmart, EWA is under increased scrutiny from regulators, including the U.S. Consumer Financial Protection Bureau (CFPB) and the California Department of Financial Protection and Innovation. For example, in New Jersey, recently enacted rules mandate that EWA providers confirm a customer’s earned income before sending them an advance and get an employee’s consent before getting information about workers from employers.


Image Credits: ZayZoon

Some consumer groups argue that EWA programs should be classified as loans under the U.S. Truth in Lending Act, which provides protections such as requiring lenders to give advance notice before increasing certain charges. The groups argue that some EWA programs can force users into overdraft while effectively charging interest through fees.

A $5 per-pay-period fee might not sound like very much, but it can add up, especially for a low-income worker — and the consequences can be disastrous. Just $100 fewer in savings can make families more likely to pursue predatory lending and forgo utility bill payments, one 2020 study showed; an estimated one in five families in the U.S. has less than two weeks of liquid savings.

Hackert takes pains to distance ZayZoon from “predatory” EWA programs, positioning it instead as a welcome alternative to late bill payments, overdraft fees, and payday loans. Users aren’t under a legal obligation to repay ZayZoon and ZayZoon won’t take action to collect payments, but nonpaying users will be limited from accessing the service in the future. At the same time, Hackert suggests ZayZoon can protect businesses — particularly smaller, independent businesses — from employees who’d otherwise steal from the cash register to make ends meet.

“ZayZoon is special in the competitive landscape because we specifically cater to small- and medium-sized businesses,” Hackert said. “ZayZoon specifically sought out to service the underserved … Financial stress is a major contributor to lost productivity and health issues.”

It remains unclear whether EWA programs are a net positive for companies, however. Taking Walmart as an example, the retail giant had high hopes of boosting retention by giving employees access to earned wages early. Instead, it found that employees using the early wage access service tended to quit faster.

It’s not just businesses that could have grievances. Some workers might object to the ways ZayZoon shares their personal information. For instance, the company has a partnership with Prizeout to run ZayZoon Boost, an optional service that pays out wages in the form of gas, grocery, and retail gift cards. ZayZoon advertises Boost as a way to earn gift cards worth more than early wage payouts. But in its privacy policy, ZayZoon makes clear that users participating in Boost agree to transfer personal and financial information to Prizeout, including their name, date of birth, gender, and address.

Beyond Boost, ZayZoon retains the right to use any user’s data to conduct research, contests, surveys, and sweepstakes and use it for marketing and promotions.  Hackert notes that workers can email ZayZoon’s customer support to request their data be deleted, but there isn’t an in-app mechanism to make this easy.

“Businesses care about ZayZoon because we greatly improve their employee well-being, productivity, retention, and recruitment efforts,” Hackert said. “ZayZoon actively seeks to collaborate in [regulatory] efforts and is supportive of well-considered regulation, as ambiguity is never a good thing. There are market entrants who unfortunately take advantage of this ambiguity at the expense of the consumer — charging high fees, operating in ways that aren’t transparent, and imposing on a consumer’s data privacy.”

With the proceeds from the equity and debt round, ZayZoon plans to invest in general product development and market expansion. When asked whether ZayZoon plans to hire in light of the global economic slowdown, Hackert replied in the affirmative, saying that he aims to grow the headcount from 60 employees to 85 by the end of the year.

Thailand’s Salary Hero is an earned wage access startup that plans to become a neobank

Salary Hero wants to provide lower-income Thai workers with more financial flexibility. The startup, which focuses on earned wage access and finance education, with plans to add neo banking products, too, announced today it has raised $2.8 million. The funding included participation from Global Founders Capital, M Venture Partners, 500 Global, 1982 Ventures, Titan Capital and Thai corporations and angel investors.

Salary Hero was founded in late 2021 by former Bain & Co. Bangkok executives Jonathan Nohr and Prabhav Rakhra. Both were also former bankers at Credit Suisse and Barclays. Other members of the founding team include Tep Neeranatpuree former head of corporate sales at Lalamove, and Thanakij Pechprasarn, former CTO at edtech startup Gantik.

Thai earned wage access startup Salary Hero's team

Salary Hero’s team

Rakhra said that while working at Bain, he and Nohr focused on financial services engagements. “With our common backgrounds both being in investment banking, and while working on strategy cases for various banks in Southeast Asia, we experienced how banks continuously de-prioritize lower income customer segments,” he told TechCrunch. That is because they aren’t as profitable as affluent demographics. As a result, Rakhra added, lower-income customers end up paying more than wealthier individuals for the same basic financial services.

“It seems fundamentally wrong that people with fewer means should pay more for financial services, if they have access at all,” he said. “We saw an opportunity to use technology to help level the playing field in Thailand and Southeast Asia.”

By being able to access their earned wages on demand, workers are able to better handle emergencies and unforeseen expenses, instead of being forced to borrow from lenders who charge 10% to 30% interest per month, Rahkra said. “These compounding rates lead to cycles of debt that are very hard to break free from,” he said. “Additionally, financial uncertainty and a lack of a financial safety net creates a lingering feeling of insecurity, and is the main cause of mental stress among workers.” He added that 80% of Thai workers who make less than $1000 USD a month have used loan sharks at some point.

The company says it has seen double-digit week-on-week user growth in 2022 among its clients in the manufacturing, logistics, hospitality and retail sectors. Salary Hero works with companies with as little as 100 staff members on their payroll, but their initial focus is on companies with a full-time headcount of between 500 to 50,000. Rakhra said that by addressing the financial needs of their workers, companies are able to improve employee satisfaction and reduce turnover in a competitive labor market. The company monetizes by charing a low access fee for its earned wage access, but does not charge interest or other hidden fees, Rakhra said.

In the future, Salary Hero plans to add neo banking products, including at-source savings accounts, insurance products, remittances and other financial services like micro-investments and debt restructuring advice. These other products will go live in 2023, while Salary Hero’s earned wage access and financial education features are already live.

In a prepared statement, M Ventures Partner CEO Mayank Parekh said, “We’re proud to be backing Salary Hero, supporting their innovative solution for employers to differentiate themselves in an increasingly competitive labor market. The future of payroll is one where we say goodbye to traditional pay cycles. Salary Hero empowers workers, and at the same time, solves immediate challenges for employers-driving retention, recruitment and productivity of their workers.”

Egyptian financial super app Khazna raises $38M from Quona Capital and Lendable

In a country where 50% of its 100 million people are active smartphone users, two out of every three individuals have little or no access to formal financial services in Egypt. 

With banks doing their best to deepen financial services to the underbanked and unbanked across the North African country, startups are also playing their part. One such provider is Cairo-based Khazna — a self-described “financial super app” that has raised a $38 million Series A in debt and equity. The company has received a total of $47 million since its inception.

The company, founded by Omar Selah, Ahmed Wagueeh, Fatimah El Shenawy, and Omar Salah in 2019, provides basic banking and various financial services focusing on middle and lower-income earners. 

Its entry point product was an earned wage access product launched in 2020. Dubbed Khazna HR, this product allows partner employers to offer cash advances to their employees, either in part or in full.

Earned wage access is gaining significant investor interest across different emerging markets such as India, Nigeria and Indonesia, where startups are helping employees — white and blue-collar — access their salaries in real time. It’s part of a financial inclusion play that saves these consumers the stress of running out of money or taking money from predatory lenders.

Some of these providers, like Refyne, Earnipay, Wagely and NowPay, another Egyptian platform, offer this as a standalone service. But for Khazna, it’s just one of the multiple services sold to consumers. Since securing an undisclosed seed round, which from some deduction falls between $8-9 million, Khazna has added offerings such as buy now, pay later, bill payments and a prepaid debit card. Similar providers in Egypt include Telda and Sympl.

“We are much more of a super app than a digital bank because we have, in addition to the financial services, launched multiple non-financial services as well on the app,” said CEO Selah, responding to questions on whether Khazna is yet another digital bank.

“How the products are designed and the merchants that we are connected to is all in line with the needs and the interests of low to middle-income Egyptian users.”

Khazna’s BNPL service is available in 1,000 merchant stores across the country, said the chief executive. He also said the platform has 150,000 users across all its products. Khazna plans to launch additional products before the end of the year; this product expansion and user growth is what Selah points out when asked how Khazna stays ahead of the competition.

Meanwhile, one key highlight in Khazna’s journey is its dedication to following the Central Bank of Egypt’s (CBE) push for financial inclusion and a “less-cash” framework. But that’s not all. According to its chief executive, the startup will seek to leverage the bank’s infrastructure for some services in its pipeline.

“We are aligned with CBE’s vision and Khazna, at its core, believes that world-class financial services should be available to all. They’re launching multiple initiatives that we are part of, including the instant payment network where we will offer some services like instant payments through this infrastructure.”

The Egyptian startup has a team of 70 people, of which its leadership team comprises former executives from WorldRemit, Uber, Jumia and Match Group. The next goal for the startup, Selah says, is to increase the number of Egyptians that use its financial super app to 1 million by the end of 2022.

It will bank on this recent financing led by Quona Capital to execute on that front. Khazna is the impact investor’s second check in an Egyptian startup after B2B retail e-commerce company Capiter

The round received participation from Nclude (the VC fund launched by three Egyptian banks and Dubai-based Global Ventures), Speedinvest, Khawarizmi Ventures, Algebra Ventures, Accion Venture Lab and Disruptech, among others. 

“In just two years, Khazna has scaled and monetized quickly and is already a market leader in the push for financial inclusion for the 35 million underbanked in Egypt,” said Monica Brand Engel, Quona co-founder and managing partner, in a statement.

“Empowering consumers and micro-businesses with Khazna’s convenient, user-centric, and transparent financial super app can enable millions across Egypt to gain greater control over their financial lives. Quona is incredibly excited about Khazna’s roadmap to be the category-leading digital super app for inclusive finance in Egypt.”

Lendable, an emerging markets lender, provided the company’s debt financing. Arab Bank Egypt was said to have facilitated the debt transaction between both parties as the “security agent.”

Indonesian earned wage access platform Wagely raises $8.3M as it expands into Bangladesh

Wagely, an earned wage access (EWA) platform based in Jakarta and Dhaka, has raised $8.3 million in pre-Series A funding, just seven months after announcing its seed round. The new funds will be used to fuel wagely’s expansion in Bangladesh, where it recently launched, and build other features to become a “holistic financial wellness platform,” including savings, insurance, long-term installment loans and financial education.

Earned wage access platforms allow workers to access wages they have already earned on demand, instead of waiting until payday. Wagely says its user base grew 10x year over year in 2021, with clients including British American Tobacco, Ranch Market, Adaro Energy and Medco Energi.

The new round was led by East Ventures (Growth Fund), with participation from returning investors like Integra Partners, the Asian Development Fund, Global Founders Capital, Trihill Capital, Blauwpark Partners and 1982 Ventures. It brings wagely’s total raised to $14 million since it was launched in 2020.

Wagely also received backing from Central Capital Ventura, the venture capital arm of Bank Central Asia (BCA), one of Indonesia’s largest private banks.

Tobias Fischer, co-founder and CEO of wagely, told TechCrunch that BCA “has one of the largest corporate networks in Indonesia. Many of these corporates fit into the target profile of wagely customers. On the other hand, wagely is already servicing some of BCA customers which presents the opportunity to leverage synergies across segments and products, not only with BCA but also other banking partners that want to innovate financial services and create positive impact.”

Bangladesh was chosen as wagely’s second market because “we see a massive opportunity for financial technology in Bangladesh that is characterized by similar attractive fundamentals like Indonesia in terms of demographics, large TAM, limited access to credit, growing demand for tailored financial services, and the ability to expand product and segments.” The startup has already signed up leading ready-made garment manufacturers like SQ Group, Classic Composite, and Vision Garments.

In a prepared statement, East Ventures managing partner Roderick Purwana said, “With wagely’s rapid growth in recent quarters, we believe they will be the preferred partner for large enterprises that aim to challenge the status quo of worker financial wellness in Indonesia and beyond.”

Earnipay raises $4M to help employees in Nigeria get faster access to their salaries

Earnipay, a fintech that provides flexible and on-demand salary access to income-earners, has raised $4 million in seed financing led by early-stage venture capital firm Canaan.

Participating investors include XYZ Ventures, Village Global, Musha Ventures, Voltron Capital, Ventures Platform and Paystack CEO Shola Akinlade.

Earnipay, which has been in beta since September 2021 and only launched last month, plans to offer its on-demand salary solution to 200,000 employees by the end of 2022. 

Most of Africa’s workforce is paid monthly but live paycheck to paycheck. Unlike more developed countries like the U.S., where weekly or bi-weekly salaries can take care of this lifestyle, low monthly wages — which is the norm in Africa — can’t. So what ends up happening is that income-earners takes salary advances or borrow money from payday lenders and loan sharks to offset their daily expenses and emergencies, eventually falling into a debt cycle.

A few individual businesses have sought to tackle this problem internally and allow employees to access their daily salaries as they work for it. Earnipay founder and CEO Nonso Onwuzulike tried this while running Reaval, a Ghana-based recycling business he started on the side in 2019.

His employees were waste collectors from the informal sector, with a history of collecting daily or weekly payments. On the other hand, Onwuzulike who had worked most of his life in the formal sector — even holding the position of country manager of Bolt Ghana during this period — was accustomed to paying and receiving monthly salaries, which caused problems for his recycling business.

“There were adverse effects of that long wait time between pay cycles, especially for these people who didn’t earn a lot of income,” said the founder describing the salary situation at his former company. “They ended up not being productive because they had money issues and it led to attrition and retention problems for me because these were guys who are used to getting paid immediately, but I was paying them once a month, and it didn’t make sense to them.”

Onwuzulike developed a solution to make their payment flexible: weekly or bi-weekly. He then figured he could scale it to companies in the formal sector and there was data to back this decision. Per a survey carried out among a few income-earners who worked in the formal sector, about 80% of them preferred having flexible access to their salaries rather than the salary advance option popularly pioneered by banks. That’s how Earnipay came to be, with Busayo Oyetunji and Joshua Ajayi joining as COO and CTO respectively. 

Earnipay is building what is known globally as an earned wage access platform. But Onwuzulike describes the company as a financial wellness solution for employees, of which its first product is on-demand salary access.

The platform integrates with companies’ existing payroll or HRM systems to offer its services to employees, who can then track and withdraw their accrued salaries via the app. 

Employees’ salaries are prorated daily and companies can set limits for the percentage of salaries employees can withdraw each month. For instance, if an employee earns ₦300,000 monthly, they can get ₦10,000 daily (for 30 days) or ₦15,000 (if the employer sets the system to count only workdays; 20 in this case). 

The founder said that Earnipay makes these payments on behalf of the company, especially those whose cash flow may be affected should they finance the payments themselves. At the end of each month, they reimburse Earnipay. But for others who can afford to make these payments, Earnipay sets up a reconciliation account on top of the employees’ salary accounts scheduled to make automatic reimbursements.

Earnipay’s revenues come from charging employees a fee for accessing a part of their salary early. For withdrawals between ₦2,000($4) and ₦10,000 ($20), Earnipay collects a ₦250 ($0.5) fee. For ₦10,000 to ₦50,000 ($100) withdrawals, the charge increases to ₦500 ($1)


Nonso Onwuzulike (Founder and CEO, Earnipay)

Since operating in beta, Earnipay has served over 20 businesses, outsourcing firms and HR solution providers in Nigeria. Some of its clients include Eden Life and Thrive Agric, whose “thousands of employees” have used the app to access their salary over 1,000 times, said the company. 

“We are super bullish on the product that we were building. Our goal is financial wellness for all and we want to build products in line with that. We’ve taken the first step, which is affordable access,” Onwuzulike said.

“The second product that we’re building is financial education to provide people with financial literacy tools so they make better spending decisions. We will build products around that primarily just so that we’ll enable employers to make their employees happier, improve productivity, retain talent and solve the biggest problem in the workplace today that nobody is solving, which is employee money issues.”

Earnipay will use this seed funding to target large enterprises and shift its focus regionally. It might face competition from YC-backed South African startup FloatPays, which plans to expand across the continent.

That said, the experience of Earnipay’s investors in backing identical companies across emerging markets will be pivotal to the Nigerian fintech’s growth. XYZ Capital is an investor in Refyne, a two-year-old Indian earned wage access platform that recently raised $82 million in Series B. The San Francisco-based venture capital firm also backs Mexico-based Minu alongside Village Global.

For Canaan, this seems to be its first investment in an earned wage access platform, judging from its portfolio. Earnipay presents an opportunity for the Connecticut-based fund to participate in a promising fintech category witnessing an increase in uptake across emerging markets.

“We’ve seen earned wage access grow rapidly in many markets and believe it’s a natural fit in Africa,” said Brendan Dickinson, general partner at Canaan. “Earnipay has quickly established itself with a product built specifically for the payroll behaviors of this region, and early employer uptake is very strong. Nonso has built one of the strongest teams that we’ve met on the entire continent, and we’re thrilled for the opportunity to partner with them.”

Pinwheel raises $50M Series B at $500M valuation for its income verification APIs

Six months after its $20 million Series A, payroll connectivity platform Pinwheel just announced that it has nabbed another $50 million in a round led by new investor GGV Capital. 

Pinwheel serves neobanks and fintechs like Block, Acorns, and Current by providing application programming interfaces (APIs) linked to payroll, income, and employment data. Historically, systems for providing such data are inefficient and clunky, a problem Pinwheel’s cofounders recognized when they were working on a startup that helped companies provide pre-tax benefits to their employees. 

Kurt Lin, Anish Basu, and Curtis Lee, who met through prior work experiences, ran into a roadblock in implementing their original solution because they found they had difficulty connecting to payroll systems. That’s when they decided to pivot into building an API to solve this problem at a large scale instead, Lin told TechCrunch in an interview.

The company’s APIs allow its customers to access more robust information about individuals’ payroll and employment, in part because they track “non-traditional” sources of income like payments made through gig platforms like Uber or apps like Venmo, Lin said. Its flagship products include direct-deposit switching, income and employment data, and paycheck-linked lending, and the data it aggregates spans nearly 80% of people employed in the United States, according to the company. 

Pinwheel’s customers can use this information for a range of applications – from offering earned wage access to employees, which allows them to access money as soon as they’ve earned it rather than waiting for a paycheck to be deposited in their bank account, to enabling paycheck-linked loans, which are considered less risky than traditional unsecured loans that require borrowers to make a voluntary bank transfer to repay the funds.  

Despite competition from other players in the somewhat-crowded payroll API space, Pinwheel has demonstrated significant traction in the market and hopes to differentiate itself by building an entire “income layer” of data for its customers that extends beyond just payroll information. 

Its platform executes over 4.6 million processes per month, a 400x increase from last year, and the company leads its market in customer conversion rates, the company says. Pinwheel grew its annual recurring revenue by 177x in 2021, according to the company, though Lin declined to share any further detail on its historical or current revenue numbers.

Lin said its success can be attributed to three key factors – commercial traction, an experienced team, and a mission-driven approach focused on “improving financial outcomes for customers who don’t have access to affordable financial products.” 

“One of our customers, for example, may be a teacher or a nurse who may be in the same job for five or six years, may have a FICO [credit score] of 550, and thus be declined from any affordable financial product. We can actually show that their income stability is totally there, they’ve been employed for a long time, and they’re actually going to perform much better [in repaying a loan],” Lin said.

Pinwheel has hired a number of its employees from $13.4 billion API company Plaid, known for enabling bank account connectivity for fintechs. 

“We’re the only player that has actually been able to not just take one or two [hires from Plaid], but we actually have a number of former employees on our team. Our VP of engineering came from Plaid, our head of commercial came from Plaid, a lot of the core engineers were actually building the platform at Plaid as well. We have all this institutional knowledge of how to do this the right way, which has really allowed us to outperform our competition because of having those folks on the team,” Lin said.

Pinwheel is also the only company providing direct deposit switching and payroll data that is classified as a Consumer Reporting Agency (CRA) in compliance with the Fair Credit Reporting Act, meaning that if consumers are adversely affected by Pinwheel’s data, the company would be legally accountable. While operating as a regulated CRA requires a “herculean amount of work,” it shows that Pinwheel is willing to “stand behind the integrity of [its] data,” Lin said.

A number of strategic investors also backed Pinwheel for the first time in the Series B round, including AMEX Ventures (American Express’s VC arm), Indeed, Kraken Ventures, Franklin Templeton. Existing investors Coatue, First Round Capital, and Upfront Ventures, participated as well.

Pinwheel plans to use the fresh funds to triple its 70-person employee base, two-thirds of whom are engineers. Although the team will stay engineering-heavy because of the technical nature of its API-focused business, Pinwheel also plans to make some hires to advance its go-to-market strategy, revenue expansion, and marketing presence, Lin said. It eventually plans to expand into areas like tax preparation by helping companies leverage its income data in new ways, Lin said.

Just after Pinwheel first came out of stealth mode in June 2020, the company received over 130 inbound messages from big banks like Wells Fargo and Citi, as well as a number of major fintechs, Lin said.

“It was kind of this lightbulb moment for us because we realized that the platform that we’re building is basically like a growth engine for all of consumer finance,” Lin said. “Whether you are a new digital bank, whether you are a PFM [personal finance management company], whether you are a new tax product, or a bank, or a lender who just needs better data for underwriting, there is something in the building blocks of our platform that actually allows you to build not just what you want to do now, but the future of your roadmap for 5-10 years from now.”

India’s Refyne raises $82 million to help workers get faster access to wages

Refyne has raised a new financing round, just seven months after securing its previous funding, as the Bengaluru-based startup scales its platform that helps workers access their earned salaries in real time.

Tiger Global led Refyne’s $82 million Series B funding, the two said Wednesday. Existing backers QED Investors, partners of DST Global, RTP Global, Jigsaw VC and XYZ Capital also participated in the new round, which takes the one-and-a-half-year-old startup’s all-time raise to $106 million.

Refyne did not disclose how it was valued in the new round, but its co-founder and chief executive Chitresh Sharma told TechCrunch in an interview that the valuation has surged 6.5 times since the Series A in June.

Refyne is building what is known in the industry as an earned wage access platform, where a link is established between reward and work. The startup works with employers to enable their workers to access their earned salaries in real time. An employee with the partnered firm can log into Refyne and see how much they have earned in a week and withdraw a fraction of it anytime they wish, for instance.

It’s not rare for people to run out of cash between their paychecks. In that moment, they either take a loan from friends and family, or go to a bank or, in an alarmingly high number of cases, approach loan sharks. Refyne is serving clients who hire both white-collar and blue-collar workers, so for many of them, a bank loan is unlikely an option.

The idea — which has been put to test in several markets — appears to be showing signs of a market fit in India, the world’s second-most populous nation. More than 150 firms — including Practo, TeamLease, Tenon, Shadowfax, Rebel Foods, Acko, BlackBuck, Arti Group and Cafe Coffee Day — are working with Refyne today to enable the service for their over 700,000 employees, Sharma said.

Its clients today operate in a wide range of categories, a factor that Sharma said requires Refyne to employ different strategies to best serve each. “For manufacturing sector, we have an on-ground team that goes for orientation and induction. Seventy percent of our effort goes before deploying. For companies that are geographically distributed, given the COVID times, we also do a lot of Zoom orientation.”

Chitresh Sharma (left) and Apoorv Kumar co-founded Refyne. Image Credits: Refyne

In a statement, Alex Cook, a partner at Tiger Global, said: “We believe Refyne will be the preferred partner for large employers that want to offer Earned Wage Access. We are excited to support Chitresh, Apoorv and the Refyne team, as they work to improve financial wellness for the Indian workforce.”

The platform, which supports 12 languages and is compatible with any human resource management system and enterprise resource planning service, has had a “significant impact on retention for the clients, and in helping employers hire faster,” Sharma said, adding that the startup was the first and the largest player in the space. That has added responsibility on Refyne to make the market aware of EWA and quash some misconceptions, he said.

“Some people confuse us with other forms of credit products such as payday lenders. So most of our effort will be in ensuring that the category is well-known while we continue to expand our growth numbers,” he said.

Sharma said the startup is working continually to improve its service and building data sets to understand how people behave to help better evaluate and project their creditworthiness. “Current credit scoring looks at people’s past behavior to determine their future.”

The startup aims to serve 3 million workers by the end of the year and is also hiring in several roles.

“The support and confidence that global investors such as Tiger Global have shown us is a testament to our mission,” he said.