Rain Instant Pay Closes Historic Funding

Rain, a provider of financial wellness products that empower and engage employees, announced  that it raised $116 million, encompassing $66 million in equity and $50M in debt. QED Investors and Invus Opportunities led the Series A with participation from firms including WndrCo, Tribe Capital, and Dreamers VC, which was co-founded by Will Smith. The debt facility was arranged by Sound Point Capital Management, LP. The funding will be used to support Rain’s continued expansion in the U.S. through investments in technology and infrastructure, employee and employer experience, and marketing.

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“We built Rain to empower people, especially hourly workers, to take control of their finances and eliminate the need for predatory payday loans”

Through the Rain platform, employers can offer workers on-demand pay or earned wage access. This benefit, also known as “income streaming,” allows workers to access their pay shortly after completing a shift instead of waiting for a payday. Rain’s service is offered free to employers who provide it to their employees as a voluntary benefit. Employees pay a small fee similar to an ATM charge each time they withdraw their earned wages. To promote responsible use, employees are never able to withdraw more than 50% of gross earned wages per pay period.

Rain is proven to help businesses attract and retain workers and is currently used by employers with a total of over half a million employees across several large healthcare systems, senior living groups, hotel franchises such as Hilton and Marriott, and fast food franchises including McDonald’s, Burger King, and Taco Bell. Employers have seen up to 80% reduction in turnover among employees using the Rain app and improved job satisfaction and engagement by 86% of Rain users.

“We built Rain to empower people, especially hourly workers, to take control of their finances and eliminate the need for predatory payday loans,” said Alex Bradford, Chief Executive Officer and Co-Founder of Rain. “With this investment, we will continue to improve our platform and deliver a powerful employee benefit that improves individual financial wellbeing and boosts morale while giving employers a valuable tool for recruiting and retaining workers during a tight labor market.”

Low-wage employees have encountered significant economic challenges during the past several years – from the current economic downturn to the COVID-19 pandemic – making it difficult for them to pay for expenses such as childcare, gas, food, and rent, not to mention unexpected expenses such as sudden health needs or emergency car repairs.

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To make ends meet, many hourly workers bridge the gap between paydays by taking out payday loans — which can sometimes come at a steep 400% annual percentage rate.2 Between payday loans, credit card interest, overdraft fees, and other penalties, Americans spent $170 billion in 2022 while waiting for their next paycheck.

“Half of America cannot get access to reasonably priced, transparent financial services products,” said Nigel Morris, Managing Partner and Co-Founder of QED Investors. “This results in unnecessary stress, anxiety, and hardship for millions of people. Companies like Rain are helping to even the playing field by giving hourly workers the ability to access the money they earn faster, providing them with peace of mind, saving them millions in fees, and improving their overall financial health.”

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