Finserv wellness startup Rain lands US$300m in funding

Rain, the financial benefits wellness startup, raises US$300m in credit facility from Clear Haven Capital Management to expand customer base

The US-based financial benefits wellness startup Rain Instant Pay has raised US$300m in financing from Clear Haven Capital Management for a credit facility. 

Rain helps companies give their employees greater control over their finances by enabling workers to gain access to their finances in real time. 

The fintech’s capabilities allow companies to increase retention, boost job applications and increase employee engagement. 

This funding comes after Rain secured US$116m in Series A funding just 11 months ago, in a round led by QED Investors. At the time, this marked the largest Series A funding round for any HR-tech company. Now it has bested its own record.

With its most recent new funding secured, Rain hopes to expand its customer base on its mission to expand earned wage access in support of everyday Americans. 

Indeed, six out of 10 American citizens have less than $500 in savings, so Rain’s platform gives more citizens access to their earned funds as and when they need them. 

Rain: Pioneering employee payments

Rain’s ultimate aim is to disrupt traditional pay cycles, which it has long seen as a barrier for many in their attempts to increase savings and achieve financial well-being. 

In fact, Rain estimates that Americans spend over US$170bn combined per year while waiting for their next paycheck, resulting in higher credit debts and overdraft fees which lead to financial instability. 

Leveraging real-time payments (RTP) technology, Rain’s platform enables employers to offer instant payments to their staff as and when staff need it.

Now, with its additional US$300m, Rain hopes to scale its services across the country, offering RTP for employees at hundreds of more businesses. 

Fred Choquette, Chief Operating Officer at Rain, says: “With this US$300m in funding from Clear Haven, we'll expand our reach and further fulfill our mission to empower all Americans to live the life that they can afford to live, protected from predatory fees and lending products.

“By giving employees access to their hard-earned wages when they need them the most, we’re alleviating the reliance on financial products that further push them into debt. We’re committed to further empowering Americans on their journey to true financial freedom.”

Today, Rain's platform is offered by McDonald's, Marriott, Hilton, Pizza Hut, Taco Bell and Wendy's, among others in the US.

Rain: Platform integration

Rain’s payments platform works by enabling workers to be paid up to once daily for a small fee per transaction – much like many pay-for-use ATMs.

Because of these operating models, Rain’s platform is free for integration for businesses, which can provide the service to employees as a voluntary benefit. Employees who opt-in can access their funds with a small fee going to Rain. 

Rain’s platform comes with wellness tools too, helping employees limit withdrawals to no more than 50% of gross earnings per pay period.

The fintech’s employer clients saw an average of 50% improvement in retention for their employees who use the app. For 2023, Rain says these employees saved a combined average of over US$51m, by avoiding overdraft fees and the interest associated with payday loans.

Managing Partner at lead investor Clear Haven Capital Management, Mark Simmer, adds: “Clear Haven is proud to commit US$300m in funding to Rain as part of its dedication to empowering both employers and employees to thrive in challenging economic circumstances and embark on a more resilient financial wellness journey.

“Rain's unwavering mission to transform the financial wellness landscape by granting employees access to their earned wages perfectly aligns with Clear Haven's vision for a more inclusive and equitable financial future. 

“We are excited to collaborate with Rain, working together to empower employees and redefine traditional concepts of financial wellness." 

If there’s one thing Rain’s funding confirms, is the growing rise of earned wage access (EWA) providers in the realm of fintech. As leading markets continue to grapple with macroeconomic headwinds and workers struggle to make ends meet, EWA providers offer a valuable resource to employees – a capability that was never available before but is today. 

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