Payflow, the financial wellbeing platform that allows employees to get paid on demand, has closed an €8 million financing round to continue its growth in Spain and its internationalization plans, which have already started in Chile and Colombia. In 2022, they plan to start operations in two additional countries and to launch at least two more products.
Payflow continues to lead the earned wage access sector. The access to earned wage has become a considerable trend in an increasing number of industries. Accessing earned income allows employees to have far greater control over their finances by empowering them to align income more effectively with expenses, helping with better budgeting and supporting their financial wellbeing. Since its inception in 2020, the company has made the leap from Spain to the Silicon Valley through the Y Combinator program. In addition, the company closed the year with a strong position in Spain with over 175 clients, including well-known brands such as Scalpers, Covirán, Aristocrazy and Grosso Napoletano as well as large companies with thousands of employees, such as Vithas Hospitals, Webhelp and Aquaservice. Besides, Payflow has 0% churn and has never lost a client.
According to Bruno Gonzalez, Partner and Managing Director at Grosso Napoletano “We are growing very fast and Payflow is one of the reasons we have been able to hire employees really quickly. Besides, it is very easy to implement, and I don’t see any reasons why companies like us should not have Payflow.”
Best-funded on-demand salary fintech in the European Union
After closing this round, the total funding raised by Payflow to date exceeds €12 million, as it previously raised two million euros in a seed round and two million euros in a debt round.
These figures make Payflow the best funded on-demand salary solution in the European Union. Additionally, it is the only on-demand salary solution in Spain that never charges employees, the company’s business model relies on a monthly fee paid by its client companies. As a result, Payflow is supported by the works councils and labor unions, and has an activation rate of 40%, which is 5-10x higher than other on-demand salary platforms and other social benefits.
Benoît Menardo, co-founder of Payflow, justifies this endorsement by saying that “The investment market is relatively efficient, in general the start-ups that get the most traction are the ones that raise the most funding. We have become, in just 2 years, the regional leader in our sector, with more than 175 clients and 100,000 users. And therefore, we are very pleased to become the best backed company,both in terms of the amount of funding and the quality of our investors”.
After the closing of this round, Payflow’s goal is to work with the most influential companies in the country, including those that make up the Ibex 35, and to continue to grow its client base, with the objective of multiplying it by five. The company plans to develop a “super app” and will be launching two new products in 2022 and many more in the coming years with the aim of positioning themselves as a neobank.
This new fundraising attracted renowned national and international investors. According to Avinash Sukhwani, co-founder of Payflow, “It is an honor to be able to count on the backing of our new top-tier investors, furthermore, we take pride in the enormous satisfaction of our 100,000 users when they realize our solution is free for them. We will continue our work until we give access to the flexibility of pay on demand to all workers in Europe and Latin America”
Among the new investors is Seaya Ventures, the Venture Capital firm with the most Spanish Unicorns, including Glovo, Cabify or Wallbox. It has also been supported by Cathay Innovation through its C. Entrepreneurs Fund, Venture Capital that also backed Glovo, Wallbox and Chime, among 14 other unicorns, as well as Force Over Mass Capital. YCombinator, which supported projects such as Dropbox and Airbnb is also part of this new fundraising, as well as investors like Rebel Fund whose partners include Steve Huffman from Reddit and Max Mullen from Instacart.
Jacky Abitbol, Managing Partner at Cathay Innovation underlines several reasons behind Cathay’s participation in the Spanish fintech’s latest fundraising: “We see the great market potential of the Earned Wage Access sector especially in the LatAm regions where there remains an impressive number of individuals underserved by traditional finance. With impact investing at the core of our investment philosophy, we trust Payflow’s outstanding executive team to sustain their impeccable growth trajectory by bringing financial wellness to workers, and our global ecosystem is right here to support them in that endeavour.”
On her side, Beatriz González, Managing Director of Seaya Ventures considers that “the on-demand salary is a worldwide trend. In a few years, everyone will earn their salary on demand. Payflow really impressed us, and we believe that Avinash, Benoit and the rest of the team are the best people to drive the company in Spain and Latin America given their strong vision and shared values.”