After fintech companies offered free salary advances to frontline workers two years ago, Claire is back with new tools to help workers get paid after they complete their shifts, and $25 million in new equity funding.
The round was led by Thrive Capital, with participation from Upfront Ventures and Kairos. Clair’s total venture-backed funding has now grown to $45 million, said Clair co-founder and CEO Nico Simko. As part of the investment, Kairos Investment Partner Michael Presser was appointed as an observer to the board.
The company also announced $150 million in funding as part of partner bank Pathward’s new consumer loan program, which holds Clair’s FDIC-insured account and provides wage advances to frontline workers. According to the company, when Claire’s clients pay salary advances, Claire is facilitating them to issue loans directly to Claire’s clients, with the loans being made between Pathward and the client.
Clair currently works with more than 10,000 employers, workforce management systems and payroll, and more than 50,000 workers. Employees will see Claire through those existing employer systems that allow you to choose a schedule separate from the payroll system. Employers can onboard employees and view salary data. Employees can download the Clair app and perform financial activities including saving, printing checks and withdrawing funds through ATMs for free.
Simko called the company’s new product “the first free on-demand payment solution” that allows users to instantly withdraw money they’ve earned but not yet received into their accounts.
“We were the first provider to go to the bank and convince the bank to give these advances, basically microloans, $50 loans,” Simko said. “Most of the early-stage pay-to-play companies are the ones who advance the money. By convincing the banks to do this, it provides regulatory certainty to our partners and consumers that there is a national bank behind it.”
Having a bank offer advances “has fueled our growth, including a 10-fold increase in revenue over the past year,” he explained, and provides a safety net for employers still contemplating the demise of Silicon Valley Bank and First Republic Bank.
Simko intends to use the new funds to meet the needs of Clair’s backlog of customers. While the company focuses on workforce management and payroll firms, the company has already received inbound requests from some of the larger enterprises that Simko aims to address.
Claire has also launched a program for employers called ” clare employer, which is their way of offering free, comprehensive financial wellness benefits to their employees. The product integrates with the company’s payroll provider, and company employees who use the product can also access additional features in their Clair accounts, including 3 percent cash back on gas and grocery purchases with their Clair debit Mastercard.
In addition, the company is considering other products, including active 401(k) and health savings accounts.
“Since financial services are tied to payroll and workforce management, there are no restrictions,” Simko said. “Most of that needs to be tied into the banking and payroll systems, and because we have these deep HR integrations, Clare’s vision is to build the best bank for the American workforce.”
Editor’s Note, July 6, 2023 8:23 AM: Updated story to reflect that the $150 million was not debt financing, but a consumer loan program.