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Los Angeles-based Rain raised a $75M Series B in another good sign for fintech
- Los Angeles-based startup Rain, offering an employer-integrated earned wage access (EWA) app, secured a $75 million all-equity Series B round led by Prosus, valuing the company at $340 million.
- Rain plans to introduce credit card and savings products using the new funds, aiming to assist the paycheck-to-paycheck population that has been rising in the U.S.
- With around 35% of U.S. households under $50,000 income living paycheck to paycheck, Rain's EWA app allows early access to paychecks with a small fee, avoiding high-interest loans.
- The startup focuses on attracting employers to provide automated earned wage access between paychecks, offering additional services like financial education and tax filing to differentiate itself.
- Rain, founded in 2019, has served over 2.5 million employees and distributed $2 billion in earned wages, intending to reduce EWA dependency by promoting savings and financial literacy.
- Rain caters to mid-market and enterprise clients charging an average fee of $3 per instant transaction and aims to expand beyond EWA into financial coaching, tax filing services, secured credit cards, and health savings account utilization.
- In the third quarter, Rain plans to launch an EWA-secured credit card and a product facilitating HSA spending with reimbursement, followed by saving accounts offering auto-save features and rewards later in the year.
- Despite a challenging fintech environment, Rain's Series B funding, with participants like Nextalia Ventures and Spark Growth Ventures, will fuel its growth and development into a holistic financial wellness platform.
- Unlike employee-side EWA platforms facing regulatory crackdowns, Rain focuses on financial awareness alongside EWA, positioning itself as a comprehensive financial wellness provider aiming to aid millions on the path to financial freedom.
- Rain aims to scale its go-to-market strategy by expanding the sales team, enhancing sales enablement and marketing efforts, forging channel partnerships, and improving employer convenience through tooling.
- Having previously secured a $116 million Series A funding in 2023, with a combination of equity and debt, Rain's innovative approach to financial wellness through employer-integrated EWA sets it apart in the fintech landscape.
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