ZayZoon, a leading fintech firm that offers earned wage access (EWA) services, has recently announced that it has raised $34.5 million in a Series B funding round. The round was co-led by Framework and EDC, with participation from ATB Financial. These funds bring ZayZoon’s total raised capital to an impressive $75 million, which the company plans to utilize for expanding its operations and accelerating the development of new features on its product roadmap.
Key Takeaway
ZayZoon has secured $34.5 million in funding to support its mission of providing earned wage access services to employees. The company aims to help employees avoid predatory loans and unnecessary bank fees, while also assisting businesses in recruitment and reducing employee turnover.
The Mission to Help Employees and Businesses
ZayZoon’s CEO, Dary Tuer, expressed the company’s mission to save 10 million employees a total of 10 billion dollars. The focus is on assisting employees who struggle to make ends meet, while also addressing the financial challenges faced by small- and mid-sized businesses. By providing earned wage access services, ZayZoon helps employees access their earned wages whenever needed, eliminating the need for payday loans and unnecessary bank fees. Additionally, the service benefits businesses by improving recruitment efforts and reducing turnover rates.
The Journey from Proof of Concept to Rapid Growth
ZayZoon was founded in 2014 in Calgary by Dary Tuer, Tate Hackert, and Jamie Ha. Hackert had the idea for the business several years prior, after lending cash to employees through online platforms. Since its inception, ZayZoon has experienced tremendous growth and has become one of the fastest-growing apps in the EWA space. The company now serves over 10,000 business customers across the United States and has partnered with over 160 payroll providers.
The Benefits and Controversies Surrounding Earned Wage Access
Earned wage access (EWA) programs, such as the one offered by ZayZoon, allow employees to request a portion of their regular paycheck in advance for a fee. These programs are marketed as alternatives to high-interest loans and credit cards. However, some consumer groups argue that EWA programs should be classified as loans, requiring certain legal protections for users. ZayZoon enables automatic withdrawals from users’ bank accounts, which can potentially lead to overdraft fees and effectively charge interest through its fees. Nevertheless, the popularity of EWA programs is on the rise, with a significant increase in usage in recent years.
Focus on Expansion Amidst Increased Regulatory Scrutiny
Despite the growing regulatory scrutiny surrounding EWA programs, ZayZoon remains committed to its expansion plans. The company, which currently employs 102 people, sees itself as a category leader in the EWA space. ZayZoon aims to strengthen its position by engaging with the institutional investment community and recently raising additional funds. By strengthening its balance sheet, ZayZoon ensures its ability to continue providing its services and cement its status as a leader in the industry.
With its recent funding success, ZayZoon is well-positioned to further its mission of helping employees and businesses navigate financial challenges and improve their overall financial well-being.
