Financial wellness platform Wagely has announced that it has raised $8.3m or Tk 71 crore in an oversubscribed pre-Series A funding in a bid to scale up its operations by helping workers access their wages on demand.

Pre-Series A funding characterizes a platform, indicating that it has already developed a validated product, attracted a substantial user base, and is able to show investors the potential to launch larger operations.

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Oversubscribed refers to founders who receive more investors or offered money than they requested.

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 operating in Indonesia and Bangladesh.

Employees may need emergency cash at any time of the month and have difficulty obtaining it. “Our solution provides the money an employee is already earning,” Rameez Hoque, Bangladesh’s managing director, told the Daily Star.

For example, if a customer requests fund support on any day of the month, he will receive a portion of his earned money.

“Only 50% of the earned salary can be withdrawn because we believe the user should not spend all that money before the salary is paid,” he said.

Instead of bank charges and interest, customers pay between Tk 50 and Tk 100 to use the money.

Launched in Indonesia in 2020 and founded by former executives from Grab and Tokopedia, Wagely has reportedly seen strong growth, with its user base growing tenfold year-over-year in 2021.

In the meantime, he said he has partnered with some of Indonesia’s biggest employers, including British American Tobacco.

Around 1 lakh people are said to have used the service and more than 70 companies have signed deals with the platform.

It was launched in Bangladesh in October 2021. So far, it has four clients: RMG SQ Group, Vision Group, International Classic Composite and Desh Garments.

“We will soon offer our services to three other companies. One of them is a non-RMG company,” he added.

Employers use wage services, in a way, to provide employee benefits, which improve retention, productivity and well-being, Hoque said.

In Bangladesh, 4.22 million workers in the RMG sector alone are suffering from lack of support in cash flow timing, according to a wage statement.

More than 70 percent of working people among them borrow or opt for informal loans in order to procure basic necessities, which puts them in the vicious circle of debt trap, he added.

“With Wagely’s rapid growth over the past few quarters, we believe they will be the go-to partner for large corporations that aim to challenge the status quo of workers’ financial well-being in Indonesia and beyond,” said said Roderick Purwana, managing partner of East Ventures.

“We are proud to operate successfully in two of Asia’s largest markets, employing over 150 million workers,” said Tobias Fischer, CEO and co-founder of Wagely.

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