Wonga Balderton backer pours money into UK start-up seeking to end payday lending
A UK start-up seeking to end payday lending has received £ 40million in new money from lenders, including an early investor in the now collapsed lender Wonga.
Wagestream, which has developed technology to give workers access to their pay any day of the month for a small fee, rather than having them wait for a wholesale monthly payment, has raised £ 15million from the companies in venture capitalist Balderton and Northzone. He also secured a £ 25million financing facility from lending bank Shawbrook.
Peter Briffett, chief executive and co-founder of the company, said the money would allow him “to accelerate the rate at which companies across the country are freeing their staff from wage poverty and the dire social consequences that flow from it.”
“The archaic monthly pay cycle inflicts enormous financial damage on household finances and its days are numbered. Too many people are pushed into a corner by working poverty and forced into the hands of payday lenders and cost credit high, ”Briffett said. .
According to industry watchdog figures released by the FCA earlier this month, payday loan complaints peaked in five years last year, up about 130% to 40,000.
The rise in complaints comes despite efforts by the UK financial regulator to crack down on high-cost loan fees by introducing limits on how much lenders could charge.