With the cost of living crisis and rising costs and interest rates, workers are struggling to manage their finances as their salaries are not stretching as far as they previously did. Workers are feeling the stress – leading to a detrimental impact on their mental health and well-being. 10% of UK employees missed days at work due to financial worries and 18% noticed a decline in productivity at work due to financial worries.
Wagestream provides crucial financial tools and services to help frontline workers globally – particularly during these trying times. They are creating a financial system that makes work more financially inclusive, fair, and rewarding. Their app offers a whole host of tools to help workers manage their finances including budgeting, building up a rainy day fund, access to a money coach, savings, and more. Wagestream serves over 3 million frontline workers globally, including at organisations like Asda, Burger King, and the NHS.
To walk the talk, they have implemented various initiatives to measure their social impact. Wagestream is one of the first fintechs to achieve B-Corp status. They also operate a social charter, where every service it provides must measurably improve financial well-being.
Founded in 2018, Wagestream has had 100% year-on-year growth. Their most recent fundraising round was their €134 million Series C fundraising round led by Smash Capital. We caught up with Wagestream’s CEO and Co-Founder, Peter Briffett, to learn more about Wagestream’s growth, operating with a social charter, and managing the financial wellbeing of frontline workers.
Wagestream has grown 100% year-on-year. What are some of the challenges you faced with rapid growth?
We’re leading a whole new ‘workplace finance’ software category, in order to improve workers’ financial wellbeing. Part of building a new category means you also have to take responsibility to educate the market on your mission and what your technology has to offer – it took us some time to convince businesses that the financial wellbeing of their employees should be a priority! For a B2B2C business like Wagestream, we needed to prove that financial wellbeing not only benefits the employee but that it has a positive business impact as well. Our data needed to show that we can improve staff retention and productivity. In addition, there were technical challenges too: ensuring our platform can integrate with large, traditional enterprises with tens of thousands of employees is critical to our growth. The persistence and dedication from everyone at Wagestream was worth it – because we know we’re unique in connecting workforce data with financial data, making it possible to deliver cheaper and fairer products as a result.
How has Wagestream evolved as the company scaled? How have you navigated the changes?
We started by reducing the need for predatory credit, by giving workers the ability to choose when they get paid throughout the month – now known as “flexible pay.” Giving people control, alongside clearer information on what they had earned throughout the month, created an extremely strong product-market fit among frontline and shift workers – which was our base to build from.
Since then, many more products have been introduced, each one designed to give members more visibility and control over their finances. Our members can set goals, put money aside for the future, chat to qualified money coaches, get discounts on shopping and bills, switch to fairer suppliers and get a payslip that updates after every shift to understand in real time their financial position – all in one app. Employers pay to offer it as their core employee benefit, and manage it all from a central portal online.
When we first launched, many employers viewed financial wellbeing in the workplace as a long-term aspiration. Now, they realise it is a national emergency, and this shift in perspective has been reflected in our rapid growth, and the growth of the market.
Up from one million at the end of 2021, now more than three million frontline workers use Wagestream across the globe, through over 500 employers like Asda, Next, Pizza Express, Greene King, Burger King, Bupa and the NHS. Over 100 new startups have launched similar models in recent years – from Brazil to Nigeria, to Vietnam. But as a market leader, Wagestream remains the only one founded with a social charter and charitable investors and is paving the way for a new generation of fairer banking as the world’s most widely-used workplace finance provider.
Could you tell us more about your social charter? How do you manage to operate on a social charter while balancing profitability and social impact?
Wagestream was established with investment from social impact organisations such as Big Society Capital, Joseph Rowntree Foundation, Social Tech Trust and Barrow Cadbury Trust. We founded our business with a social charter, meaning we have a dual responsibility: improve the financial wellbeing of frontline workers and grow a commercially sustainable business at scale.
I often get asked if the social charter forces us to make trade-offs. The answer is “Yes!” It creates a healthy tension that makes us think carefully about decisions and their impact on our different stakeholder groups. But more often than not, the two goals are symbiotic, and we consistently find that our focus on impact has positive effects commercially. It means we’re more disciplined on the problems we solve, we hire people who are more passionate, we’re more discerning about the investors and partners we work with, and we’re seen by employers and members as a more trustworthy provider. We even find it leads to more positive relationships with regulators, analysts and the media – because our values and our agenda are clear from the outset.
What advice would you offer to other social impact startups looking to implement a social charter?
Very few businesses have rapidly scaled a business that’s socially accountable from day one – but we’re proud to be an example, and I’d wholeheartedly encourage others to consider it. Balancing these two responsibilities isn’t always easy. There will be points at which putting positive impact first isn’t the easiest, or most profitable path. You’ll also have to invest in understanding, measuring, reporting and improving your social impact.
If you’re looking to ‘get rich quick’, this isn’t the path for you. But if you want to work with passionate people, solve massive societal problems, and build a business that can grow commercially while creating a positive legacy, then it could be for you. Think about the underlying socio-economic problem you want to solve, and seek out the leading experts on that problem – that’s your best place to start.
You are one of the first fintechs to become a B-Corp. Could you tell us more about the decision behind pursuing the B-Corp certification? What value does being a B-Corp have for fintechs?
Our journey to becoming a B Corporation was a little unusual. For most organisations, it’s about gaining ethical credibility and – often for the first time – learning how to measure impact. But for Wagestream, it was about going through a formal process to validate our existing social charter. Additionally, we felt it was important to benchmark our broader social and environmental impact beyond our product.
There are so many benefits to achieving B-Corp status, but something we’ve found particularly valuable has been joining a community of like-minded businesses, to share best practice on how to balance our social mission with business growth. Its also an important requirement for our clients and partners.
As the cost-of-living crisis continues, what further actions do you think should be taken by employers, governments, and others to help alleviate the financial strain on households?
Our role is levelling the playing field for frontline and shift workers, who pay almost £500 more for basic services every year than the rest of the population – this is called the poverty premium.
The problem existed before recent inflation, and will remain long after. But, recent developments like Covid-19 and a global inflation crisis have definitely accelerated a response to the problem. While governments can always do more to help underserved populations, banks have proved to be ineffective and still charge more for financial services than middle or higher income earners.
That’s why our technology can change things, because for the first time, it allows the employer to ‘be the bank’ and support their staff financially, plugging the gap left by public services and risk-averse financial institutions.
Continuous pay rises and one-off grants aren’t commercially viable long term, but there’s been a surge in businesses shifting their benefits budget to encompass broader financial wellbeing support as an additional way to help – by 2022, 93% of UK employers were putting something in place, compared with 51% just a year prior. Their financial wellbeing programmes are typically broad, because the needs of a workforce are diverse – from savings tools, to money coaching, to discounts and budgeting tools – and ideally built around pay…which is, after all, the most important benefit an employer has for its employees!
Every one of these groups should be thinking about what they can do for frontline and shift workers, who represent half of the working population but remain underserved and overlooked.
What’s next for Wagestream?
We’re now expanding rapidly in the US and Europe. In our core UK market, our aim is to develop an even broader range of financial products and services, with many designed or made accessible to frontline and shift workers for the first time – such as fairer insurance, credit and sick pay cover.