Indonesian startup that allows employees to cash out unpaid wages bags $5.6m funding

Tobias Fischer has spent his whole professional career in the alternative credit sector. In 2012, he helped Rocket Internet in Germany to develop peer-to-peer (P2P) lending solutions. “It was when no one knew about P2P lending platforms,” Fischer tells Tech in Asia.

In 2015, he became a director at Singapore-based P2P lender Capital Match. Two years later, he became the first hire of Grab Financial, the super app’s financial arm.

He helped Grab roll out its financing solutions for the company’s drivers in Indonesia, Malaysia, and Thailand. According to Fischer, that experience allowed him to learn a lot about the dynamics of blue-collar workers like those drivers and how they manage their financials.

“Every time they have a problem, they will fix it with a loan. And for the lenders, its business is to rely on those people to keep coming back. Then, it will become a vicious cycle,” he says.

(From left) Wagely co-founders Tobias Fischer, Sasanadi Ruka, and Kevin Hausburg / Image credit: Wagely

After that experience, he came up with another solution that he thought could provide a more sustainable financing alternative. Enter Wagely, a platform that Fischer co-founded to enable Indonesian workers to access their earned but unpaid wages in real time.

Fisher launched the platform last year amid the pandemic and has acquired more than 50 large enterprises as clients in the country, including the Indonesian branch of British American Tobacco, the operator of retail chain Ranch Market, and cosmetic company Mustika Ratu.

The company in a statement claims that, in total, the Wagely platform serves tens of thousands of employees.

It has also just announced its US$5.6 million seed funding round led by Integra Partners (formerly known as Dymon Asia Ventures). Asian Development Bank Ventures, Indonesian conglomerate PT Triputra Investindo Arya, Global Founders Capital, Trihill Capital, 1982 Ventures, and Willy Suwandi Dharma (the former president director of Adira Insurance) also participated in this round.

According to Fischer, the firm will use the fresh funds to scale its sales team and expand its value propositions for employers and employees.

Not a lending company

Fischer founded Wagely with two other co-founders: former Tokopedia vice president of engineering Sasanadi Ruka and Kevin Hausburg, the co-founder of Germany-based independent agency Madape Media.

Through the Wagely app, employees can know how much unpaid wages they have at any given moment and cash out some of that amount to pay bills or other unexpected expenses.

It’s different from “kasbon,” a common practice in Indonesia where employers can give some informal loans to their employees and deduct the payment directly from the employees’ salary. According to Fischer, that method can make the employers feel uncomfortable if they want to reject their employees’ application and may become an administrative burden for the HR department.

On the other hand, Wagely’s users can directly cash out their unpaid wages and get the money right away. There is no cost for the employers, but the employees have to pay a flat fee of 35,000 Indonesian rupiah (around US$2.5) every time they want to cash out their wages.