- Earned wage access platform Rain has raised $116 million in Series A funding.
- The round consisted of $66 million in equity and $50 million in debt financing.
- Rain has disbursed more than $150 million in earned wages to its users, and grown its user and client base by 20% in the past 30 months.
Rain, an earned wage access platform, has secured $116 million in combined equity and debt funding. The Series A round consisted of $66 million in equity financing and $50 million in debt, and was led by QED Investors and Invus Opportunities.
“We built Rain to empower people, especially hourly workers, to take control of their finances and eliminate the need for predatory loans,” Rain CEO Alex Bradford said. “With this investment, we will continue to improve our platform and deliver a powerful employee benefit that improves individual financial wellbeing and boosts morale while giving employers a valuable tool for recruiting and retaining workers during a tight labor market.”
Also participating in the Series A were WndrCo, Tribe Capital, and Dreamers VC. The debt facility was provided by Sound Point Capital Management. Rain will use the funding to fuel expansion in the U.S., as well as make investments in technology, infrastructure, marketing, and employee and employer experience.
Rain’s platform enables employers to offer workers on-demand pay or access to earned wages. The company refers to the benefit as “income streaming,” and allows employees to receive their pay after completing a shift rather than waiting for a payday that may be weeks away. Workers are charged a small fee which Rain equates to an “ATM charge” when withdrawing earned wages. Additionally, workers cannot withdraw more than 50% of their gross earned wages per pay period. Earned wage access has emerged as a alternative to payday loans, which often charge exorbitant rates of up to 400% APR. Rain noted that employers using its app have experienced a reduction in employee turnover of up to 80%.
Founded in 2019, Rain is headquartered in Santa Monica, California. The company launched its Instant Pay app in 2020, and has grown its user and client base by more than 20% over the past 30 months. Rain has disbursed more than $150 million in earned wages to its users, helping them avoid “tens of millions in predatory fees” the company noted in a statement.