Spanish FinTech startup Payflow, a cellular app that permits staff to receives a commission at any time when they need, has simply closed an fairness financing spherical of €10 million in main and secondary investments.
Cusp Capital was the one investor to take part on this spherical permitting Cusp Capital to turn into the investor with the very best stake in Payflow going ahead. Whole fairness raised now stands at €24 million, plus €27 million in debt financing (together with €20 million from BBVA Spark).
“Cusp Capital shared our perception in sustainable scaling and never growth-at-all-cost. With a gentle burn fee underneath €100k/month, we’ve attracted traders who worth environment friendly execution and being EBITDA optimistic,” mentioned Avinash Sukhwani, Co-founder of Payflow. “We had been vastly oversubscribed on this spherical, with 4x extra capital on the desk than what we had been on the lookout for, we selected Cusp Capital for his or her robust conviction in our mannequin and our sustainable development technique.”
Based in 2020, Payflow is a B2B SaaS answer supplied to employers for a hard and fast month-to-month charge, whereas staff can use the profit freed from cost. By way of their app, customers can entry their earned wage, save with an automatic digital piggy financial institution, obtain monetary training, and luxuriate in the benefits of Versatile Compensation.
The corporate seems to be to be a market chief in Spain and Latin America, with over 1.000 purchasers and “11 out of the 60 largest employers in Spain“, and is presently increasing internationally throughout Europe. Its shopper base contains manufacturers resembling Lidl, Mango, Decathlon, 5 Guys, and lots of others.
“We had been impressed by the imaginative and prescient and present execution capabilities of Payflow. The industrial momentum and excessive social affect is an excellent worth proposition and positions Payflow because the main Earned Wage Entry participant in Europe,” says Christian Winter, Common Companion at Cusp Capital. “As a part of one among our funding theses, we put money into digital merchandise for lower-income shoppers and employees, a gaggle usually ignored by mainstream options. Payflow is constructed precisely for this viewers, which is likely one of the the explanation why we see robust development potential.”
Earned Wage Entry reportedly provides staff larger management over their bills, enabling extra accountable spending and bettering their monetary wellness. For firms, the answer reduces worker turnover — by a median of 21% — resulting in a notable Return on Funding (>20x).
As well as, Payflow extra not too long ago launched a second product: Flexflow. This product generally known as versatile advantages is a Mastercard card that permits staff to economize by spending tax-free on sure classes (e.g., meals, public transport, kindergarten, and so forth.).
Extra particularly, staff spend straight from their gross wage as a substitute of their internet wage and subsequently save on revenue tax. That is Payflow’s fastest-growing product and already represents virtually 15% of the corporate’s income.
With fewer than 50 staff Payflow generates already greater than €6 million in income, with a median EBITDA of -10% over the previous 6 months. As well as, with the present burn fee, this spherical provides Payflow at the very least 7 years of runway.
Benoît Menardo , Co-founder of Payflow, provides: “We grew 70% in 2024 and our EBITDA is barely marginally destructive, this implies we’re performing very effectively within the Rule of 40 metric, persistently being above 40%”
The Co-founders of Payflow point out that they plan to remain targeted and use the overwhelming majority of the proceeds to go deeper in Spain, Portugal, Colombia, and Peru.
Sukhwani explains, “Proper now, we’re simply scratching the floor. In Spain, as an example, with 70,000 downloads, we’re reaching solely 0.3% of the 21 million working inhabitants. That is just the start and we’re excited to be engaged on a market with such excessive potential to go deeper.”
Menardo enhances this saying “what makes Earned Wage Entry most complicated is know-how – it’s because it requires partnerships with HR and payroll software program. These markets are extremely fragmented and subsequently partnering with these software program suppliers creates monumental entry boundaries. Now that now we have constructed integrations with 60+ software program and that we cowl 99%+ of payslips in these 4 markets, we have to leverage these technological moats and strengthen our place because the #1 participant in all 4 markets.”
