DailyPay secures $300m loan from Barclays
On-demand payment company DailyPay secured a $300 million revolving credit facility from
“This credit facility will allow us to work with more of the nation’s largest employers to provide on-demand compensation to their employees,” said Jason, Founder and CEO of DailyPay.
said in a statement. The private New York start-up helps workers access their earned wages in real-time and gets paid after companies complete payroll. Providing this service requires a massive balance sheet, he said Barrons.
DailyPay used earned wage claims – which refers to the money workers earned in their jobs – to secure the Barclays loan (ticker: BCS). The transaction is the first time a major bulge-bracket bank has accepted this type of collateral to finance itself, Lee said. DailyPay now has a war chest of around $1 billion, Lee said.
Founded in 2016, DailyPay provides software that allows employees to control when they get paid. Companies generally pay their staff every two weeks. DailyPay’s software gives mostly hourly workers access to their money as soon as they earn it, Lee said. It employs more than 800 people.
The funding comes less than a year since DailyPay raised $500 million in capital in May. The startup was valued at over $1 billion at the time. Since then, DailyPay has added around 200 customers and now provides services to 500 businesses, including
), Kroger (KR) and
DailyPay has also made inroads to encourage banks to use its services more. PNC Bank began offering DailyPay services to its business customers in February. Lee said DailyPay is “half a step” from mainstream banks like Chime or
(JPM) offering its services to their account holders.
DailyPay isn’t profitable, but the fintech is economically positive, meaning it makes more money per customer than it spends to get one, Lee said. He still plans to go public, but it’s unclear when that might happen. “As expected for a company of our size and scale, we are gearing up to be IPO ready,” Lee said.
Write to Luisa Beltran at [email protected]