Australian fintech Beforepay has today announced the successful completion of its AU$4 million Series A capital raise. The round, which closed in nine days and was oversubscribed, brings the total amount raised this year to over AU$6 million.
The AU$4m Series A round was led by venture capital investor, Airtasker Chairman and Vocus Communications founder James Spenceley. The funds from the capital raise will be used to enable Beforepay to keep up with user growth and the demand it is experiencing for its pay advance product.
CEO and co-founder Tarek Ayoub said the funding round will ensure Beforepay can continue to keep up with demand and help more working Australians access their Pay On Demand.
“We are doing for salaries what buy now, pay later has done for shopping,” he said. “Beforepay offers a flexible alternative by providing individuals with access to their salaries in advance of their pay schedules. Beforepay is addressing the gap in the buy now, pay later market, which is currently only accepted at around 13 per cent of merchants nationwide.
“We’re on a mission to give Australians greater financial control and convenience by opening up access to money they have already earned when they need it.”
Within only a few months of commercial launch, the fintech has surpassed over 100,000 registered customers and is experiencing exponential 20 per cent week-on-week growth in the number of pay advances. Beforepay is now, on average, providing an Australian with a pay advance every 53 seconds.
“Traditional consumer credit products as well as the payroll model are ripe for disruption and have been for some time.” Mr Ayoub said.
“With every area of our lives – from the way we work to the way we order food – facing digitally-driven changes, many of which for the better, we think it’s time that the way we access our wages and the way consumers access credit catch up to modern lifestyles. “
Beforepay uses machine learning, artificial intelligence, location data and statistical analysis to offer personalised financial management solutions.
The app syncs with a customer’s bank account and can detect when their wage is deposited and how much they get paid. It makes up to $200 available to its users in advance of the wage landing in their account. When a customer’s salary arrives, Beforepay then deducts the amount the client cashed out and adds a one-time 5 per cent fixed transaction fee.
Commenting on his investment, James Spenceley said: “Buy now, pay later plans, while incredibly successful, have to-date only been available for mostly physical products and from a subset of merchants.
“Not only does Beforepay bring the buy now, pay later model to a much larger pool of merchants, but it now makes it available for services, dinners and life’s unexpected items. The resulting demand and opportunity is great news for both consumers in general as well as investors in the company alike.”