The fundraising was joined by ADB Ventures, PT Triputra Investindo Arya (one of Indonesia’s largest privately held groups), Global Founders Capital, Trihill Capital, 1982 Ventures, Willy Suwandi Dharma (former President Director of PT Asuransi Adira Dinamika), and others.
Founded by Tobias Fischer and Sasanadi Ruka in February 2020, wagely enables Earned Wage Access (EWA) to employees in real-time. The fresh funding will go towards accelerating the adoption of its financial wellness platform, according to a press release.
Fischer was previously a regional lending program manager at Grab for eight months prior to moving to ADB as a regional fintech advisor for three years. Subsequently, he had co-founded Impact Credit Solutions, a fund management company before setting up wagely with Ruka. Ruka was Tokopedia’s vice president of engineering where he led fintech business units for one year and three months.
Indonesian workers will be able to access in real-time and withdraw their earned wages with wagely, providing a more affordable and sustainable alternative to predatory loans, the startup said.
For employees, this means that they can be flexible on how they withdraw their salaries depending on their financial obligations.
A study conducted by the Organisation for Economic Co-operation and Development (OECD) in Southeast Asia showed that over 50% of employees reported that they are stressed about their finances and over a third reported that issues with personal finance are a distraction at work.
Poor financial wellness creates unproductive and disenfranchised workers, costing employers an estimated $300 billion in productivity losses.
“More than 100 million Indonesian lower- and middle-income workers are living paycheck to paycheck and struggle with unexpected financial expenses between paychecks – which in turn impacts businesses with higher turnover, lower productivity, and more employee loans,” says Fischer, CEO at wagely.
Over 70% of the Southeast Asian adult population is still underbanked and lack access to affordable and responsible financial services. This exposes them to the cycle of debt caused by overdraft fees, high-interest credit, and payday loans. Earned wage access solutions offer a sustainable alternative to employees.
More than fifty large enterprises have adopted the startup’s financial wellness solution, including Bentoel Internasional Investama (British American Tobacco), Supra Boga Lestari (Ranch Market), Mustika Ratu, and Kencana Energi Lestari.
As concerns over COVID-19 continue to grow, employers around the world, including Walmart, Pizza Hut and Visa, are turning to EWA solutions to reduce turnover, enhance productivity, and increase business savings.
Dailypay, a leading US-based EWA provider, just recently raised $500 million and reached unicorn status. Other EWA providers are backed by Softbank (Payactiv, US), Jeff Bezos and Bill Gates (Wagestream, UK; Minu, MEX), and Peter Thiel (Even, US).
Payactiv already counts more than 2 million users and has processed more than $5 billion in earned wage access, highlighting the tremendous potential of the sector.