Calgary-based FinTech startup ZayZoon has raised an additional $15 million USD in equity financing through the extension of its Series B round.
The round extension was led by Israeli venture fund Viola Fintech with participation from Intuit Ventures, previous investor Export Development Canada, and the original Series B round leader Framework Venture Partners. ZayZoon said the financing will support its continued growth, innovation, and expansion.
While ZayZoon still only serves the US, it claims to have grown by a factor of eight in the past two years.
ZayZoon originally closed $34.5 million in debt and equity Series B financing in September 2023, which combined with this extension brings the total size of its Series B round to $49.5 million. That $34.5 million consisted of $20 million in debt and $14.5 million in Series B preferred share funding and resulted in Framework partner Ajay Gopal joining ZayZoon’s board.
With this latest funding, ZayZoon has now raised $68 million to date. As was the case with ZayZoon’s initial Series B financing, a ZayZoon spokesperson declined to disclose to BetaKit whether this extension included any secondary capital.
The spokesperson told BetaKit that this funding will fuel “future innovation,” and product development and enhanced support for small to medium-sized businesses in employee recruitment, retention, and financial betterment, noting that ZayZoon intends to expand its team accordingly.
ZayZoon was founded in 2014 as an earned wage access startup, which allows workers to receive a percentage of their wages before their employer’s formal weekly, bi-weekly, or monthly payouts. Also referred to as on-demand pay, it is marketed as a way to give employees more financial flexibility by providing them with control over when they get paid.
The business model has been called “payday loans by another name” because consumers pay to receive their paycheque, although it is closer to a cash advance than a loan with interest. In ZayZoon’s case, employers integrate its platform for no charge while employees pay a five-dollar transaction fee for a cash advance from their own bank accounts, or no fee with the ZayZoon prepaid Visa card.
RELATED: ZayZoon closes Series B to fuel continued US expansion of earned wage access business
ZayZoon currently only serves the United States, having never taken hold in Canada due to the lack of willing partners compared to down south. The startup claims its business has grown by a factor of eight in the past two years. It currently counts Amazon warehouses, Dunkin’, Burger King, Domino’s, DoubleTree by Hilton, Lids, Mazda, McDonald’s, Panera Bread, and Subway as customers.
Earlier this year, ZayZoon made it into The Canadian Innovation Exchange’s top 10 growth startups list and was recognized by Kitchener-Waterloo innovation hub Communitech as one of six new Canadian tech companies that have the potential to reach $1 billion in revenue by 2030.
In a statement, ZayZoon co-founder and CEO Darcy Tuer credited the startup’s growth to tailoring its product and support for small-to-medium-sized businesses, adding that Intuit and Viola sharing that value will aid in ZayZoon’s goal of saving 10 million people 10 billion dollars.
“By empowering individuals to have better control and flexibility, ZayZoon not only alleviates financial stress but also cultivates stronger relationships between employers and employees in the SMB space,” Viola Fintech partner Noam Inbar said in a statement. “We believe that the company will play a pivotal role in shaping the future of financial well-being and we are committed to supporting that journey.”
UPDATE (03/28/24): This story has been updated to note responses from ZayZoon.
Feature image courtesy ZayZoon.
