Calgary-based FinTech startup ZayZoon has recently secured $34.5 million USD in debt and equity Series B financing. The company, which specializes in earned wage access, aims to help employees at small to medium-sized businesses in the United States access their earned wages before traditional pay periods.
The round was led by Toronto’s Framework Venture Partners, with co-investment from Export Development Canada (EDC) and participation from ATB Financial and undisclosed existing investors. ZayZoon did not disclose the specific breakdown of debt versus equity. However, the funding round included $20 million in debt and $14.5 million in Series B preferred share funding.
This latest capital injection brings ZayZoon’s total funding to approximately $75 million. The company plans to allocate the funds toward recruiting efforts, as well as further growth and innovation.
ZayZoon, founded in 2014, offers earned wage access services to employees. This service allows workers to withdraw a percentage of their earned wages before their regular pay periods, typically for a fee. The startup claims that companies using its product have witnessed a reduction in employee absenteeism and turnover, as well as an increase in job applicants.
The startup serves various industries, including Amazon warehouses, Dunkin’, Burger King, Domino’s, DoubleTree by Hilton, Lids, Mazda, McDonald’s, Panera Bread, and Subway. ZayZoon’s customers benefit from increased financial flexibility and control over their pay schedules.
Although earned wage access services like ZayZoon’s have gained traction in the United States, it hasn’t seen the same level of adoption in Canada. ZayZoon currently focuses solely on the US market.
As inflation rises and many North Americans struggle to make ends meet, ZayZoon has experienced significant growth in payouts, with a year-over-year increase of over 400%. With the persistent labor shortages faced by businesses in various sectors, the startup sees potential for continued expansion.
ZayZoon intends to use the newly acquired capital to enhance its offerings for employees and employers in industries such as hospitality, retail, and food services. By providing employees with greater access to their earned wages, ZayZoon aims to alleviate financial stress and promote workforce stability.
Sources:
– Private Capital Journal
– TechCrunch
– Vox