There are so many opportunities to innovate financial services that one might not even notice how outdated the bi-weekly pay cycle has become, especially for those living paycheck-to-paycheck. For decades the norm has been simple: employees who work today receive payment from employers later–sometimes days or weeks later, sometimes longer.
But between paychecks, life happens–a bill is unexpectedly high or a child needs extra dental work. Suddenly that time gap–between earned wages and the payment of those wages–has a big and unhelpful impact on an employee’s life and financial well-being.
That’s why FRAMEWORK is excited to announce our series B investment in ZayZoon as part of FVP Fund II. ZayZoon has emerged as a leading Earned Wage Access (EWA) provider for small- and medium-sized businesses. They are shaking up the industry with inventive financial products at the intersection of payroll, employer and employee designed to build financial empowerment for every employee.
ZayZoon’s series B financing raised $34.5 million USD in debt and equity, led by FRAMEWORK Venture Partners, with co-investment from Export Development Canada (EDC), and with participation from ATB Financial and existing shareholders. We’re thrilled to welcome them to the FRAMEWORK portfolio and to help catalyze their growth–in turn helping millions of people build financial resilience, well-being and literacy through fintech.
ZayZoon’s core EWA product gives employees instant access to a portion of their earned but unpaid wages for a flat transaction fee. Without ZayZoon, their choices typically involve predatory payday lenders who often further the negative financial cycle for workers through punishing interest, fees and other charges.
But EWA is just the beginning of how ZayZoon will reshape financial empowerment and further dominate an emerging sector. Our investment thesis is that ZayZoon is uniquely positioned to expand beyond its impressive core EWA business to become the top financial management platform for the everyday employee. The company is poised to become the go-to platform for employee financial well-being, as they layer in products for employee benefits and rewards, gift cards (targeted to employee shopping habits), financial literacy resources and financial services such as credit building products and loans.
With year-over-year growth of more than 400% in payouts, and partnerships with internationally recognized franchises, ZayZoon has turned early momentum into an Earned Wage Access movement for improving employee financial health. Employers are clearly adopting ZayZoon’s simple solution, easily integrated into most existing payroll systems and up-and-running in minutes.
As workplaces fight to attract and retain talent through unique programs and benefits, employers are actively seeking tools to improve employee performance, recruitment and turnover–and that now includes employee financial well-being. In this period of inflationary pressure and rising interest rates, workers are experiencing increased financial stress and need simple ways to counter it through new financial services and literacy tools. And ZayZoon's results are compelling: 89% of employees who use ZayZoon report less financial stress, while employers who use ZayZoon, report a 29% reduction in turnover.
In addition to EWA, ZayZoon also offers flexibility in how wages are disbursed, including bank deposits, debit cards, and fee-free options like Gas Cards and Instant Gift Cards as well as a unique gift card marketplace for recurring bills that stretch employees wages further when it really matters.
Earlier this year, ZayZoon was recognized as Partner of the Year at the 2023 ADP Marketplace Partner Summit, while the company’s list of corporate partners–aided by seamless integrations in widely-used payroll and HR infrastructure–positions it extremely well for scalable growth.
We are thrilled to be working with the ZayZoon team including Darcy Tuer, (co-founder and CEO), Tate Hackert (co-founder and President), and Jamie Ha, (co-founder and CFO). We’re excited to witness all that they can accomplish!
Click here to learn more about ZayZoon for employers.
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