Asia’s earned-wage access (EWA) service provider, Paywatch, recently has raised US$30 million (approximately RM141 million) in a mix of equity and credit facilities to fuel its growth. This landmark funding round is the largest secured by an EWA provider in Southeast Asia.
Paywatch employed a dual approach of equity and credit facilities to secure the recent US$30 million funding round. The company received over US$14 million (approximately RM65 million) in Series A equity investment led by Third Prime, alongside a consortium of US investors, including Vanderbilt University and the University of Illinois Foundation.
New investors Octagon Venture Partners and Wooshin Venture Investment Corp also participated. Additionally, Paywatch secured US$16 million (around RM75 million) in credit facilities from global banks such as Citi, aimed at funding product expansion.
Significance of Funding Mix
Raising US$30 million from both equity and credit facilities is significant as it provides Paywatch with the flexibility to accelerate its growth plans.
The equity investment will bolster the company’s financial stability and enable strategic initiatives, while the credit facilities will directly support product expansion and operational scaling.
This dual approach ensures a balanced and robust financial foundation for the company’s ambitious plans.
Motivation of Investors
The Series A equity investment was led by Third Prime, a US-based venture capital firm, along with Vanderbilt University and the University of Illinois Foundation.
These investors were motivated by Paywatch’s potential to revolutionise financial inclusion in Southeast Asia.
Michael Kim, General Partner of Third Prime, highlighted Paywatch’s momentum in the region and its role as a change agent in the EWA market, emphasising the company’s alignment with global trends in employee benefits.
Support from Credit Facilities
The US$16 million credit facilities from global banks, including Citi, are crucial for Paywatch’s product expansion. These funds will enable the company to scale its operations, enhance its technological infrastructure, and introduce new features to its EWA solution.
This support from established financial institutions underscores the confidence in Paywatch’s business model and growth trajectory.
Leveraging Market Position
With over US$58 million (approximately RM273 million) in salaries processed to date, Paywatch is the largest EWA service in Asia by transaction volume. The company plans to leverage this position to further penetrate the market and increase user adoption.
Paywatch expects to disburse over US$120 million (more than RM518 million) in salaries by the end of the year, more than doubling its lifetime volume.
This growth trajectory is driven by the company’s commitment to providing a debt-free EWA solution and fostering financial stability for workers.
Strategic Initiatives and Product Development
Paywatch plans to prioritise several strategic initiatives with the recent influx of funding. These include expanding into new markets, developing more financially inclusive tools, and enhancing its current product offerings.
The company aims to support the Malaysian workforce’s unique needs through partnerships with local entities and continuous innovation.
Advancing Malaysia’s Financial Inclusion and Digital Economy
Paywatch is aligned with Malaysia’s National Financial Inclusion Strategy and the Malaysia Digital Economy Blueprint (MyDIGITAL). By providing instant access to earned wages, Paywatch supports the government’s efforts to reduce income disparity and promote financial resilience.
The company’s innovative EWA solution is set to enhance the financial well-being of Malaysian workers and contribute to the nation’s socio-economic development.
