Salary Hero in Thailand is an earned wage access startup that wants to add neo-banking products

Salary Hero wants to offer low-income Thai workers greater financial flexibility. The startup, which focuses on access to earned wages and financial education, with plans to add neo-banking products as well, announced today that it has raised $2.8 million. The funding included participation from Global Founders Capital, M Venture Partners, 500 Global, 1982 Ventures, Titan Capital and Thai companies and angel investors.

Salary Hero was founded in late 2021 by former Bain & Co. Bangkok executives Jonathan Nohr and Prabhav Rakhra. Both were also former Credit Suisse and Barclays bankers. Other members of the founding team include Tep Neeranatpuree, former head of enterprise sales at Lalamove, and Thanakij Pechprasarn, former CTO of edtech startup Gantik.

The Salary Hero team, a Thai startup providing access to earned wages

The Salary Hero Team

Rakhra said while working at Bain, he and Nohr focused on financial services assignments. “With our shared background in investment banking and while working on strategy cases for various banks in Southeast Asia, we have seen how banks continually deprioritize low-income customer segments,” he said. he told TechCrunch. This is because they are not as profitable as the affluent demographic groups. As a result, Rakhra added, low-income customers end up paying more than wealthier people for the same basic financial services.

“It seems fundamentally wrong that people with less means pay more for financial services, if they have access to them,” he said. “We saw an opportunity to use technology to help level the playing field in Thailand and Southeast Asia.”

By being able to access their earned wages on demand, workers are able to better manage emergencies and unexpected expenses, instead of having to borrow from lenders who charge 10-30% interest per month, a said Rahkra. “These compound rates lead to cycles of indebtedness that are very difficult to break free from,” he said. “Additionally, financial uncertainty and the lack of a financial safety net create a lingering sense of insecurity and are the leading cause of mental stress among workers.” He added that 80% of Thai workers who earn less than $1,000 a month have resorted to loan sharks at some point.

The company says it saw double-digit week-over-week user growth in 2022 among its manufacturing, logistics, hospitality and retail customers. Salary Hero works with companies with as few as 100 employees on their payroll, but their initial focus is companies with between 500 and 50,000 full-time employees. Rakhra said that by meeting the financial needs of their workers, companies are able to improve employee satisfaction and reduce turnover in a competitive labor market. The company monetizes by charging a low access fee for its access to earned salary, but does not charge interest or other hidden fees, Rakhra said.

In the future, Salary Hero plans to add neo-banking products including payroll savings accounts, insurance products, remittances and other financial services such as micro-investments and debt restructuring advice. These other products will go live in 2023, while Salary Hero’s earned pay access and financial education features are already live.

In a prepared statement, Mayank Parekh, CEO of M Ventures Partner, said, “We are proud to support Salary Hero, supporting their innovative solution enabling employers to differentiate themselves in an increasingly competitive job market. The future of payroll is one where we say goodbye to traditional payroll cycles. Salary Hero empowers workers and, at the same time, solves the immediate challenges for employers in retaining, recruiting and productivity of their workers. »

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