Wagestream closes £40 million Series A led by Balderton and Northzone with revolving debt facility by Shawbrook

WAGESTREAM HITS £40M RAISE — THE UK’S LARGEST EVER SOCIAL IMPACT INVESTMENT

  • £40m milestone arrives after latest £15m cash injections from investors co-led by early-stage venture capital specialists, Balderton and Northzone
  • Rapid adoption of Wagestream platform by UK firms proves employers are willing to invest in financial wellness and tackle in-work poverty
  • Wagestream is a ‘get-paid-as-you-earn’ service that allows workers to access their earned income in real time
  • Firm seeks to end the payday poverty cycle, kill off the payday loans industry and encourage straight-from-salary savings
  • Over 120,000 UK employees at clients including David Lloyd, Rentokil PLC, Camden Town Brewery, Slug & Lettuce and Carluccio’s can now access wages in real time

London, Embargoed 20 May 2019 0001 — Flexible wage app, Wagestream, which campaigns against payday poverty and seeks to end the financial stress caused by the monthly pay cycle, has secured the largest social impact investment ever in the UK.

The firm’s latest round sealed this week — with early-stage venture capital specialists Balderton and Northzone co-investing together — adds £15m resulting in a total raise of £40m ($52.5m)

The funding total means that Wagestream — which allows staff to draw down a percentage of their earned wages any day of the month for a flat £1.75 fee — has attracted the largest pool of social impact investment in UK history.

With Wagestream, there are no loans involved and therefore no interest is charged.

Tech investor Balderton has raised £2.7bn over 19 years and has backed startups including Revolut and Nutmeg, while Trustpilot-backer Northzone has raised €1bn, targeting more than 130 companies since 1996.

This latest round comes on the back of earlier investments from QED, co-founding Investors in Wagestream, the Joseph Rowntree Foundation, the London Co-investment Fund (LCIF) and Village Global — a global VC backed by leading entrepreneurs including Bill Gates and Jeff Bezos — on top of a wholesale funding facility of up to £25m from specialist savings and lending bank, Shawbrook.

Venture capital and professional funders measure the investment worth of companies by looking at the full range of their capital resources.

Wagestream is on a mission to end in-work poverty, eradicate payday loans and destroy the ‘Poverty Premium’, whereby people on low incomes pay more for a range of essential products and services such as insurance, energy, and credit.

Wagestream is doing this by short-circuiting the monthly pay cycle — an antiquated monthly windfall that forces workers into the hands of payday lenders and other high-cost lenders when they approach the end of the month or face unexpected expenses.

Rapid adoption of the Wagestream platform by UK corporations proves employers are willing to invest in staff financial wellness and tackle in-work poverty.

Employers from across the private and public sphere including Rentokil Initial, Hackney Council and Roadchef have identified a number of CSR and HR advantages to the service.

For example, staff have greater financial security, which breeds loyalty, and employers trying to fill overtime shifts, particularly during unsociable hours, have noticed it becomes easier to do this once they use Wagestream.

This is because employers can elect to give workers access to that pay as soon as their shift is over — thereby re-establishing the link between work and reward. In fact, research shows that shift workers choose to work 22% more hours on average once enrolled in Wagestream.

The Joseph Rowntree Foundation’s investment came through the Fair By Design Fund, a movement committed to tackling the Poverty Premium by changing essential services so they don’t cost more to low income consumers. It is a  joint partnership with JRF, Big Society Capital, Barrow Cadbury Trust and Tech Trust.

Wagestream is also a supporter of Finance For Good — a collective of fintech services firms committed to improving the financial wellbeing of everyday people.

Peter Briffett, CEO and Co-Founder, Wagestream, commented:

“The feedback we are getting from private companies and public sector customers alike is that staff are happier, more productive and have greater financial security once they start using our service.

“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.

“Wagestream is at the point of scaling up rapidly and this historic investment is going to accelerate the pace at which companies across the country liberate their staff from payday poverty and the disastrous social consequences that stem from it.”

Dr. Thomas Hellmann, Professor of Entrepreneurship and Innovation at Oxford University’s Saïd Business School, added:

“This fund raising is an example of the convergence of VC and impact investing, a Fintech venture attacking a pressing social problem with an innovative business approach. Fintech is constantly evolving and maturing, so it is exciting to see it deliver not only commercial, but also social, value.”

Nigel Morris, Co-Founder and Managing Partner of QED Investors, commented:

“We are extremely proud of our investment in Wagestream. As its co-founding investor, we’ve worked closely with management since its inception, helping Wagestream grow from a seed-stage start-up into the dominant player in the space.

“Employers and employees love this business, and so do we. It’s a unique combination of high customer satisfaction, strong leadership, rapid growth and social good. Very few companies check all those boxes. We’re thrilled to be associated with Wagestream.”

Rob Moffat, Partner, Balderton Capital, added:

“We fell in love with the strong product-market fit of Wagestream. We very rarely hear such universal positive feedback from all who have tried a product. Companies used to take an active role in supporting the financial health of their users but this has slowly been eroded, to the extent where employees paid at the end of the month are effectively subsidising their employer for 29 days a month. Wagestream starts to restore the right balance.”

Jeppe Zink, Partner, Northzone added:

“Fintech is delivering where the financial services industry has failed, by putting consumers’ financial wellness at the core of the industry. This is not just a new business model, it’s a fundamentally new way of doing business. We think Wagestream can be the leading light for a consumer-led era of finance, and we are excited to partner with them on the journey.”

If you’re interested in joining Wagestream then email us at pressoffice@wagestream.co.uk

— ENDS —

Notes to Editors

For more information, please contact:

Neil Millard, Rhizome Media: neil@rhizomemedia.co  |  07803 560 331

Martin Greenland, Rhizome Media: martin@rhizomemedia.co  |  07582 770055

About Wagestream

Wagestream’s goal is to end the payday poverty cycle, which sees a significant percentage of Brits taking out ultra-high interest loans to bridge their way to payday.

Wagestream is also a supporter of Finance For Good — a collective of fintech services firms committed to improving the financial wellbeing of everyday people.

Wagestream does this by enabling employees to receive a percentage of their accrued earnings anytime during the month, sparing them from using loans and payday lenders.  They can draw down earned funds using a mobile app for a flat fee of £1.75. Wagestream Ltd is registered with the Financial Conduct Authority as an EMD Agent (reference 902046) of PayrNet Limited, an Electronic Money Institution authorised by the Financial Conduct Authority (reference number: 900594).

BCN Group secures revolving credit facility with NatWest for acquisitions

Beech Tree Private Equity backed BCN Group raises a significant acquisition facility to support its buy-and-build strategy and appoints David Goldie as Chairman BCN Group, a fast-growing provider of IT managed services to UK businesses today announces that it has raised a significant acquisition debt facility to support its buy and build strategy. The company has also appointed David Goldie as the Chairman of the Company. David has been involved in a number of businesses across the unified communications and cloud services space and brings a wealth of experience in executing successful buy and build strategies.

The new acquisition facility provided by NatWest and led by Mike Malone (Director Structured Finance) and Emily Smithies (Senior Manager, TMT) will give BCN the firepower to supplement its organic growth with several strategic bolt-on acquisitions to increase both the scale and the breadth of the Group’s service offering.

CEO Simon Kelf commented: “We all welcome David to the board, his experience around executing buy and build strategies will be a great help as we deliver our strategy. We are looking at several potential acquisition opportunities already which will enable us to provide an even broader portfolio of products and solutions to our clients and an increased level of opportunity for our staff. This committed facility will support our strategy and enable us to move faster when assessing strategic acquisition opportunities. I look forward to hopefully announcing our first deal in the not too distant future”.

David Goldie, Chairman of BCN Group commented: “I am delighted to have joined the Board of BCN, the team have created a very successful IT managed service business with a real focus on customer service. I am looking forward to working with the team and Beech Tree Private Equity to pursue the buy and build strategy”.

Richard Smart, Managing Director, Head of Regional Structured Finance, NatWest commented: “This is another great example of our ability and desire to support high growth, high potential SME’s achieve their strategic growth ambitions, we very much look forward to working alongside BCN to help them deliver on their exciting future plans”.

BCN and Beech Tree Private Equity were advised by debt specialists Clearwater International and DLA Piper. Natwest were advised by Addleshaw Goddard.

About BCN
BCN Group, headquartered Manchester, provides a full range of IT managed services to support UK businesses. BCN provides on-premise, hybrid and cloud hosting solutions, cloud migration services, application support, voice solutions, data management, hardware sales and maintenance services to hundreds of customers across the country.

About Beech Tree Private Equity
Beech Tree Private Equity is a mid-market private equity specialist operating in high-growth sectors of the UK economy. We invest between £10m and £40m into UK headquartered businesses providing funding for Management Buy Outs, Secondary Capital (to provide partial cash out for founder shareholders) along with Primary Capital (to accelerate growth organically or through acquisition following “buy and build” strategies).

Notes to the Editor:
The key people and advisers to the transaction are as follows:

Beech Tree Private Equity: Andy Marsh, Adam Rudd, Ben Cartwright
BCN Debt Advisors: Clearwater International (Joe Dyke, Mark Ward)
BCN Legal Advisors: DLA LLP (Matthew Christmas, Alexander Yeramian, Holly Daley)
NatWest: Mike Malone, Amy Wright, Rachael Cloke, Emily Smithies
NatWest Legal Advisors: Addleshaw Goddard LLP (Richard Oman, Caroline Gray, Emma Whitehall)