Imagine, as an employee, being able to access money as you earn it.
Technology company ZayZoon, based in Calgary, has created a platform, Early Wages On-Demand, that allows people to access their paycheque before payday.
The concept has taken off across North America.
The platform is now available to more than two million employees by way of 80,000 businesses.
Recently, ZayZoon firmed up $15 million in financing from local institutional and private capital providers, including Prairie Merchant Corp. and Bluesky Equities Ltd., to grow their technology platforms that help employers and employees.
The company said the financing allows ZayZoon to further its mission of improving employee emotional and financial health through socially responsible financial products like the Early Wages On-Demand and Employee Wellness Program.
“Our capital providers have chosen to invest in ZayZoon because they see the positive impacts we are making on the financial well-being of employees across North America and the passion we have for building an exceptional business,” said Darcy Tuer, co-founder and CEO of ZayZoon.
“This $15-million raise is going to help us improve the size of our footprint. The financing is to help us continue to improve the product and provide the employees with access to those early wages.”
The company officially started in 2014 and hit the ground running with product and partnerships in 2017.
“With this latest round of financing, ZayZoon will continue to develop its financial wellness platform and employee benefits programs to better service employers and employees who already count on ZayZoon each and every day,” added Tate Hackert, president and co-founder of ZayZoon.
“The mission of our company really is to improve the emotional health of our customers by way of socially responsible financial products. The flagship product that we offer is the wages on demand, which in effect is a way that employees can access their wages as they earn them versus kind of being pigeon-holed to that typical two-week pay cycle. Many employees are forced into a situation where they’re using payday loans and other short-term credit mechanisms to float their cash for that two-week period. So ZayZoon was really created as a way to provide employees access to liquidity in between paydays. We give access to your earned wages.”
The bulk of the company footprint is in the United States – about 70 per cent and growing.
“The focus of the business right now is primarily in the U.S.,” said Tuer.
“You’d be surprised at the number of employees who ask their employer for early access to wages. I think it’s around 13 per cent. It actually creates an uncomfortable relationship between the employee and the employer. The employer will do it because they understand the cash flow problem. They probably understand the distress will have issues for the employee in terms of productivity. So employers tend to love what we do when we roll it out because we administer all of it. It requires no work on the employer’s part and they know their employees are being extended a responsible financial solution that keeps them away from those predatory lenders.”
Tuer said the company is working to explore other jurisdictions. Similar issues are presenting themselves in the U.K., Asia and other markets.
“Given that we’re obviously a cloud-based platform and we’re currently operating in English, French and Spanish, so you can imagine transposing this into other markets wouldn’t be a huge leap for us,” said Tuer.
Mario Toneguzzi is a Troy Media business reporter based in Calgary. He writes for Calgary’s Business.