Earned Wage Access (EWA) platforms that allow workers to withdraw their earnings on demand instead of waiting until payday are spreading around the world. Today, Indonesian EWA startup announced that it has raised $5.6 million in strategic funding led by Integra Partners (formerly known as Diemon Asia Ventures). Other investors include Asian Development Bank (ADB) Ventures, PT Triputra Investindo Arya, Global Founders Capital, Trihill Capital, 1982 Ventures and Willy Swandi Dharma, former chairman director of the insurance company PT Asuransi Adira Dinamika.
Founded in 2020 by alumni from two of Southeast Asia’s biggest tech companies, it expects to reach over 250,000 users this year. Chief Executive Officer Tobias Fischer was the 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 ClearTips that having worked at financial services companies in Southeast Asia, he and Ruka observed that “managing cash flow is the most pressing issue for low- and middle-income Indonesians.”
While the pandemic exacerbated financial difficulties, Fischer said more than 75% of Indonesians are already struggling to cover unexpected expenses amid paychecks. Many borrow from family or friends, but if that option isn’t available, they may turn to payday lenders, who may charge annual percentage rates in excess of 360%, or keep their balance until their next paycheck. Can pay overdraft and late fees to banks.
“This is the start of a vicious and costly debt cycle that has a long-term negative impact on individual financial well-being, which in turn affects businesses with higher turnover, lower productivity and more employee debt,” Fisher said.
On average, more than 50% of employees of Wage Enterprise customers use it multiple times throughout the month to track their daily income and access their earned wages. The company’s ultimate goal is to “build a holistic financial wellness platform for low- and middle-income workers” that includes savings, insurance and other financial services including smart spending products, Fischer said.
More companies around the world are allowing workers to choose when they get paid. Some notable EWA platforms include Gusto’s Flexible Pay; Dailypay, which recently achieved unicorn status; wage; Menu and sum. In Indonesia, wage competitors include Gajigesa and Gajiku.
Fischer said the wage “made the wage access category earned in Indonesia,” and is a market leader with more than 50 large companies, including state-owned enterprises and multi-national conglomerates. Its new funding will be used to grow the Wage sales team to close more enterprise deals. Wegley’s current clients include PT Bentoel International Investma TBK (British American Tobacco); PT Supra Boga Lestery 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 Makanawi, President & Director of PT Kenkana Energy Lestari TBK, said, “Provides financial stability to our employees in times of uncertainty. This is incredibly important and a vital step towards the long-term resilience of our business.” With no changes to our payroll process, Welli’s solutions have proven to increase our business savings and help our employees avoid predatory debt while providing savings and budgeting tools that enhance their financial literacy.