Earned wage access (EWA) platforms that allow workers to withdraw their earnings on demand instead of waiting until payday are proliferating around the world. Today, Indonesian EWA startup wagely announced it has raised $5.6 million in strategic funding, led by Integra Partners (formerly known as Dymon Asia Ventures). Other investors included the Asian Development Bank (ADB) Ventures, PT Triputra Investindo Arya, Global Founders Capital, Trihill Capital, 1982 Ventures and Willy Swandi Dharma, former president director of insurance company PT Asuransi Adira Dinamika.
Founded in 2020 by alumni of two of Southeast Asias largest tech companies, wagely expects to reach more than 250,000 users this year. Chief executive officer Tobias Fischer was former regional lending program manager at Grab Financial Services Asia, while chief technology officer Sasanadi Rukua served as vice president of engineering at Tokopedia.
Fischer told TechCrunch that after working at financial services companies in Southeast Asia, he and Ruka saw that managing cashflow is the most pressing everyday issue for lower- and middle-income Indonesians.
While the pandemic exacerbated financial hardships, Fischer said more than 75% of Indonesians already struggled to cover unexpected expenses between paychecks. Many borrow from family or friends, but if that option is unavailable, they may turn to payday lenders who can charge more than 360% annualized percentage rates, or pay overdraft and late fees to their banks until their next paycheck.
This is the start of a vicious and costly debt cycle that has a long-lasting negative impact on individual financial well-being, which in turn impacts businesses with higher turnover, lower productivity and more employee loans, Fischer said.
On average, more than 50% of employees at wagelys enterprise clients use it multiple times throughout the month to track their daily earnings and access their earned wages. The companys ultimate goal is to build a holistic financial wellness platform for lower- and middle-income workers that includes other financial services, including savings, insurance and smart spending products, Fischer said.
More companies around the world are allowing workers to pick when they get paid. Some notable EWA platforms include Gustos Flexible Pay; DailyPay, which recently hit unicorn status; Wagestream; Minu and Even. In Indonesia, wagelys competitors include GajiGesa and Gajiku.
Fischer said wagely created the earned wage access category in Indonesia, and is the market leader with more than 50 large companies, including state-owned enterprises and multi-national conglomerates. Its new funding will be used to increase wagelys sales team in order to close more enterprise deals. Wagelys current customers include PT Bentoel Internasional Investama Tbk (British American Tobacco); PT Supra Boga Lestari Tbk (Ranch Market); beauty and wellness company PT Mustika Ratu Tbk; and renewable energy group PT Kencana Energi Lestari Tbk.
In a press statement, Wilson Maknawi, president director at PT Kencana Energi Lestari TBK, said, wagely offers our employees financial stability in times of uncertainty. It is incredibly important and a crucial step for the long-term resilience of our business. With no changes to our payroll process, wagelys solution has proven to increase our business savings and helped our employees to avoid predatory loans while providing savings and budget tools that increase their financial literacy.