Clair Raises $4.5 Million to Disrupt Payday Loans

Over the past several months, there’s seemingly been an uptick in venture capital funding for FinTechs who help ease financial pain points that the current pandemic has exacerbated. Take, for example, the need for those who are working to access their money quickly in order to catch up on their bills. That’s what the startup Clair aims to help with — and now the company has announced that it’s raised $4.5 million. The seed round was led by Upfront Ventures, with Founder Collective, Walkabout Ventures, former Venmo COO Michael Vaughan, and Seamless founder Paul Appelbaum also participating.

Clair offers instant pay access solutions for gig economy apps as well as traditional workforce companies. By allowing workers to tap their earnings right away, the hope is that these employees, freelancers, and contractors will be able to avoid pricey payday loans or other options when they need funds.

Clair also believes that its services can help with bringing new workers aboard and retain them. Citing a 2019 report, the startup notes that 65% of skilled gig workers said they’d consider moving to a different platform if it meant they’d be paid faster. Additionally, 85% stated that they’d likely work more if they received their pay more quickly.

Commenting on the need for Clair’s services, the Fintech’s CEO and co-founder Nico Simko remarked, “We are thrilled to be one of the only sources of free capital for America’s hourly and gig workers. We believe that everybody should be able to freely access money they’ve already earned.” Simko added, “There are more payday lenders than McDonald’s in the US that charge on average more than 300% annual interest on loans. So we have one simple vision: it’s time for change.” Meanwhile, Upfront Ventures partner (and now Clair board member) Aditi Maliwal said of the company, “We are excited to back a social-impact driven FinTech with a sound business model. Many FinTechs that we’ve seen often struggle with profitability because their customer acquisition costs are so high. We think Clair’s strategy of creating a product embedded in other services that workers already use today is one that will set them apart in the long run.”

As it turns out, Clair isn’t alone in thinking that workers should be paid sooner. For example, DailyPay allows employees to access their earned funds for a $1.99 per transfer fee (although this fee had been waived in recent months due to the pandemic). Currently, some of the brands utilizing DailyPay include Burger King, Sprinkles, Vera Bradley, Berkshire Hathaway, Westgate Resorts, and more.

With the financial challenges that employees and freelancers are facing, it’s easy to see how Clair’s platform could be helpful. Moreover, with the gig economy continuing to grow, there’s definitely opportunity for the service to grow. Therefore, while Clair may only be at the seed round now, don’t be surprised if larger funding rounds follow closely behind.


Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Uber Relaunches UberPool as UberX Share

With demand for travel continuing to rise, the ridesharing app Uber has announced a feature to help both travelers and commuters to get to their destinations while saving money. After previously pausing its UberPool service option during the pandemic, Uber is now rolling out a replacement called UberX Share. At this time, the new option is available to riders in New York City, Los Angeles, Chicago, San Francisco, Phoenix, San...

Split Payment Platform Kasheesh Launches as Alternative to BNPL

In recent months, "buy now, pay later" (BNPL) platforms have exploded in popularity. What's more, with Apple jumping into the space, the practice is likely to continue growing despite some concerns in regards to how BNPL services impact consumers' personal finances. With that in mind, one FinTech has just revealed its alternative: a payment-splitting platform for online retail. Today, Kasheesh exited stealth mode to announce the launch of its unique...

Credit Karma Money Spend Adds Cashback Offers for Cardholders

Those looking to add some extra cash back into their pocket will soon have a new option. This week, the popular credit monitoring site Credit Karma announced a new feature for its Credit Karma Money customers. Now, debit cardholders will be able to earn cashback when making purchases from select retailers. According to the site, the list of eligible retailers includes national chains, such as Adidas and Shake Shack, as...