FinTech News
On-Demand Employee Pay Platform Rain Raises $66 Million
A startup that helps employees access their earned wages more quickly and easily has just raised some major funds of its own. This week, Rain announced that it has raised $66 million in equity. The Series A was led by QED Investors and Invus Opportunities, while WndrCo, Tribe Capital, and Dreamers VC also participated.
In addition to the equity round, Rain raised an additional $50 million via debt facility, arranged by Sound Point Capital Management. Rain says that the fresh capital from both of these mechanisms will help support their continued expansion and allow them to further invest in technology, infrastructure, employee/employer experience, and marketing.
Rain is a platform that allows employers to offer on-demand access to their wages, enabling them to claim a portion of their pay shortly after completing their shifts. While the service is free for employers to offer, employees may need to pay a fee (which Rain compares to an ATM charge) when withdrawals are made. The platform also notes that employees are only able to withdraw up to 50% of their gross earned wages per pay period.
According to Rain, more than half a million employees currently have access to the service, including those working for major hotel chains such as Hilton and Marriott, as well fast food companies McDonald’s, Burger King, and Taco Bell among many other businesses. The company states that businesses that use Rain see an average of 80% reduction in employee turnover.
Speaking to the idea behind Rain, the company’s CEO and co-founder Alex Bradford stated, “We built Rain to empower people, especially hourly workers, to take control of their finances and eliminate the need for predatory payday loans. With this investment, we will continue to improve our platform and deliver a powerful employee benefit that improves individual financial wellbeing and boosts morale while giving employers a valuable tool for recruiting and retaining workers during a tight labor market.”
QED Investors co-founder and managing partner Nigel Morris said of the firm’s investment in Rain, “Half of America cannot get access to reasonably priced, transparent financial services products. This results in unnecessary stress, anxiety, and hardship for millions of people. Companies like Rain are helping to even the playing field by giving hourly workers the ability to access the money they earn faster, providing them with peace of mind, saving them millions in fees, and improving their overall financial health.”
Although Rain isn’t the only startup to offer such a service, it’s clear that there is demand for a platform that can help employees fill in the financial gaps between pay days. In turn, it’s not a surprise that Rain has managed to claim such an impressive Series A. Given their existing roster of clients and this new influx of capital, it seems that Rain well be well poised to make it pour in the months ahead.
