Spanish company Payflow launched in January 2020 as salary-advance fintech platform. Over the last two years, the company has seen its popularity surge (it currently has over 175 clients covering more than 100,000 users) and it has now achieved a successful round of funding on a day that highlights the need for salary advances, Blue Monday.
The company has achieved a $9.1 million Series A funding round with backing from Seaya Ventures and Cathay Innovation via its C. Entrepreneurs Fund, which is co-leading the round. There was also participation from Force Over Mass Capital, Y Combinator, and Rebel Fund.
What makes Payflow unique is it enables a salary-advance service for employers to give staff, but rather than putting a fee on users who will then see a lesser salary, the company charges companies a commission for the technology. This has made the platform a hit with labor unions.
Speaking about this unique proposition, co-founder Avinash Sukhwani, said: “We differentiate from other pay-on-demand companies because we have never charged an employee for using the service (we are the first true employee benefit, fully paid by the company).”
Co-founder Benoît Menardo added: “[Payflow] is free for users and it will always be the case. Our vision is to provide the first true employee benefit for blue-collar workers and we believe that if the employee has to pay for it, it’s not a real perk.”
What Payflow will do with this investment
Payflow will expand its product as it aims to become a neobank (online bank).
Menardo noted: “In 2022, two features [will be added] that strengthen the b2b value proposition through bringing financial wellness to blue collar employees. Later on, by developing many b2c features [the plan for the app is] essentially turning into a neobank.”
There isn’t a timeline for this development, but Menardo said “this concept is especially powerful once we have millions of users.”
Menardo also added: “We plan to launch our first d2c feature before the end of this year.”
Aside from product development, Payflow will spend $3 million on increasing its customer base in Spain by five times and ten times worldwide.
The company will also explore new territories and expand into two new countries within Europe and Latin America. Currently, the company is available in Spain, Chile, and Columbia. There are also demo versions of the technology available in Portugal and Italy.
Safe to say, Payflow looks set to expand in a major way in 2022.
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