A young Indian startup that is betting that earned wage access solutions will take off in the South Asian nation said on Wednesday it has closed a new round from high-profile investors.
Bangalore-based Refyne said on Wednesday that it has raised $16 million in Series A from partners of DST Global and RTP Global. The one-year-old startup also disclosed that it raised a $4.1 million seed round in December from Jigsaw VC and QED Investors and XYZ Capital, all of whom also participated in the new round.
TechCrunch reported last month that Refyne was in talks with RTP Global to raise money.
Refyne works with employers to let their workers access their earned salaries in real time. An employee can check Refyne and see how much they have earned in a week and withdraw a fraction of it anytime they wish.
The idea, explained Refyne's co-founder and chief executive Chitresh Sharma, is that many individuals in India run out of cash before their next payday and then some end up taking loans on not so favorable terms to make ends meet.
"An employee should have the option to access their own earnings at any time," he told TechCrunch in an interview.
"When faced with a mid-month liquidity crunch, the apparent options for employees to access quick cash include payday loans or micro-credit schemes. However, these instruments often carry predatory pricing, which further exacerbates employees’ debt obligations and mental wellness," the startup said.
It's a concept that has taken off in several markets -- with many major employers such as Uber and McDonald's offering this flexibility to their workforce -- but is yet to be tested in India, where on paper, earned wage access should work, as a significant portion of the working force remains on a shaky financial footing. Earlier on Monday, Indonesian startup Wagely announced a $5.6 million fundraise to test this idea in the Southeast Asian market.
Sharma, a third-time founder who returned to India to start Refyne, said the startup's plug-and-play software is aimed at employers of all size, and the platform can prove beneficial to blue-collar as well as white-collar workers.
“The need for financial inclusion is more important today than ever before. As the first company in India to provide earned wage access, Refyne can revolutionise the way millions of workers manage their money. By providing a real, affordable alternative to payday loans, Refyne will not only improve a person’s financial health, but it will add control for the consumer and dramatically reduce the stress on those who worry about meeting their financial obligations," said QED Investors managing partner and co-founder Nigel Morris in a statement. This is QED's first investment in India.
More than 100 companies in India are already using Refyne's platform, serving over 300,000 employees. Some of the clients include Rebel Foods, Cafe Coffee Day, Hira Group and Chai Point.
Refyne plans to deploy the fresh capital to expand its technology team and accelerate its growth. By the end of the current financial year, it aims to serve 1 million workers in India.