SteadyPay raises $4 million to help gig economy workers stay afloat with salary top-ups
- SteadyPay is an app that allows workers with fluctuating paychecks to top up their wages when they fall short.
- Millions of people participate in the gig economy in the UK - with many working flexible hours through apps such as Uber or takeaway giant Just Eat.
- The company has raised $4 million in a seed funding round, backed by venture capital firm Hambro Ventures and social impact fund Fair By Design.
- Click here for more BI Prime stories.
SteadyPay, a startup that lets workers on irregular incomes top up their monthly wages, raised $4 million in a seed fundraising round backed by VC firm Hambro Perks.
Around 57 million people work in the US gig economy, according to analytics firm Gallup, with many using tech firms like Uber or Lyft to pay their bills. The same applies to 5 million workers in the UK. But due to the inconsistent nature of gig work, monthly pay packets can vary wildly. That's where SteadyPay comes in.
Speaking to Business Insider, cofounder and CEO John Downie said he hoped to make the gig economy an "easier place for people to work."
He said: "We want to have a positive impact on peoples' lives and help them avoid getting into debt spirals. We're pleased to have brought in investors who want to help create a better environment for these workers."
SteadyPay users are charged a weekly £4 (or $5.20) subscription fee. Based on an analysis of their previous paychecks, the company calculates their average weekly or monthly income, and offers them an interest-free top-up if their pay comes in below the line. Customers can borrow up to £1,000 (or $1,300) interest-free, and agree to a repayment plan that suits them.
The app, which had a soft launch in December 2018, only has "several hundred" users at present, according to Downie, but will target thousands more over the next year, including gig economy workers, those on zero-hour contracts, and freelancers.
He added that the company would use the new investment to scale up, making new hires and building on the startup's current nine-strong team.
The firm's new seed funding round is led by Hambro Perks, which previously backed online creative network The Dots and Muslim dating app MuzMatch, and Fair By Design, the social impact fund from Ascension Ventures.
Elena Moneta, principal of Hambro Perks and incoming director of SteadyPay, said: "Hambro Perks is thrilled to support SteadyPay in its mission to help gig economy workers overcome the hurdles of volatile pay.
"For the increasing number of gig and self-employed workers, having access to a simple and ethical solution to address the financial complexities that come with such work is key. As the company engages with its customers directly, we believe it will become the go-to financial partner for atypical workers."
Emma Steele, investment manager at Fair By Design, added: "We are very excited to bring on SteadyPay as another vital solution to the Poverty Premium. Along with the other solutions in the portfolio, SteadyPay solves a very important societal issue.
"By enabling freelancers and gig workers to have access to a more predictable income stream through their income top-up tool, we believe SteadyPay addresses a key aspect of financial vulnerability. We look forward to working with the team to support them on their journey to scale."
