Financial wellness platform Wagely raises $8.3m

Financial wellness platform Wagely has announced raising $8.3 million or Tk 71 crore in an oversubscribed pre-series A funding in an effort to scale up its operations in helping workers access their earned salaries on demand.

Pre-series A funding characterises a platform, denoting that it has already developed a validated product, has attracted a substantial user base and is able to show investors the potential to launch bigger operations.

Oversubscribed refers to the founders getting more investors or money offered than what they asked for.

The round was led by East Ventures and participated by existing backers, including Integra Partners, Asian Development Bank, Global Founders Capital, Trihill Capital, Blauwpark Partners, and 1982 Ventures.

This brings the total funding raised in less than two years to $14 million (Tk 120 crore) for the company having operations in Indonesia and Bangladesh.

Employees may need money on an emergency any time of the month and face difficulty in getting it. "Our solution provides the money that an employee already earns," Rameez Hoque, managing director, wagely Bangladesh, told The Daily Star.

For example, if a customer applies for the fund support on a day of the month, he will get a portion from his earned money.

"Only 50 per cent of the earned salary can be withdrawn as we think the user shouldn't spend all of this money before the payment of the salary," he said.

Instead of banking charges and interests, the customers pay a flat fee anywhere from Tk 50 to Tk 100 for availing the money.

Launched in Indonesia in 2020 and founded by former Grab and Tokopedia executives, wagely said to have witnessed strong growth as its user base grew tenfold year-on-year in 2021.

Meanwhile it said to have partnered with some of Indonesia's largest employers, including British American Tobacco.

Around 1 lakh people are said to have availed the service and over 70 companies signed deals with the platform.

It was launched in Bangladesh in October 2021. Till now, it has four customers -- RMG companies SQ Group, Vision Group, International Classic Composite and Desh Garments.

"We will soon offer our service to many other companies, including non-RMG ones," he added.

Employers avail wagely services, in a way, to offer employee benefits and this improves retention, productivity and wellbeing, said Hoque.

In Bangladesh, 4.22 million workers in the RMG industry alone suffer due to the lack of support in cash flow timing, said a wagely statement.

More than 70 per cent of workers among them either borrow or opt for informal loans in order to afford basic necessities that puts them in a vicious circle of the debt trap, it added

"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," said Roderick Purwana, managing partner of East Ventures.

"We are proud to be successfully operating in two of the largest markets in Asia, employing more than 150 million workers," said Tobias Fischer, CEO and co-founder at wagely.