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Up to 78% of American workers live paycheck to paycheck, according to a study conducted by CareerBuilder last year. That’s over 170 million people without the safety net of more than a few weeks’ pay, if that means budgeting is a required skill for many.
In this context, Walmart – the largest private employer in the world, with more than 2 million “associates” – in partnership with a duo of fintech startups last year to bring financial planning tools and early access to salaries to its employees. One of them was Same, a mobile app that integrates with your bank account to show you how much money you can safely spend anytime.
Using a feature called Instapay, Even also allows Walmart staff to withdraw some of their income earlier, before their official paycheck arrives. To be clear, this only covers the money they’ve already earned from the job – it’s not a loan as such. It simply bridges the gap between an urgent expense and when a paycheck is normally deposited.
Founded in Oakland, Calif., In 2014, Even has already raised $ 12 million in funding. But thanks to the success of Walmart, which it says led to the enrollment of 200,000 (15%) of Walmart’s 1.4 million employees in the United States, it has now raised an additional $ 40 million from Walmart. by Khosla Ventures, with the participation of Peter Thiel. Valar Ventures, Allen & Company, Harrison Metal, SV Angel, Silicon Valley Bank, and Bull City Venture Partners (BCVP), among others.
It seems that Even’s main competitors here, at least from Instapay’s perspective, are traditional lending services such as banks and credit cards, as well as payday loans which are popular solutions to the problems. short-term cash flow. But payday loan fees can be astronomical, and legislation is in preparation curb this kind of high interest short term loans. Signing agreements with companies such as Walmart, Even says, allows the employer to cover all costs and charges on behalf of employees, as a benefit, and the service costs less than a Netflix subscription through anybody.
“Americans [are] to lose $ 240 billion each year to predatory financial services like credit cards, overdraft fees and payday loans, ”said Even CEO Jon Schlossberg. “In contrast, Even’s business model is designed so that we only profit when our customers do. We charge a fixed, predictable monthly subscription, like Netflix. In return, our members get a new set of financial services, designed from the ground up to fit the lives of busy people, so that they actually use them – to spend smarter, avoid debt and save money. money. If people see value in these services and continue to use them, we benefit; if they don’t, we don’t.
Walmart is the first, and currently the only, such a corporate partnership, although anyone can download the company’s mobile app and integrate it with their bank account to access budgeting features. Regarding other corporate deals that may be in the works, however, a spokesperson told VentureBeat “… there has been significant interest from other Fortune 500 companies.” This is a key part of Even’s latest roundtable, according to the company.
With an additional $ 40 million in the bank, Even said he plans to expand its operations, including doubling its workforce and opening a new corporate office in the United States on the East Coast.
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