Salary Hero wants to give low-income Thai workers greater financial flexibility. The startup, which focuses on access to earned wages and financial education, with plans to also add neo-banking products, announced today that it has raised $2.8 million. Funding included participation from Global Founders Capital, M Venture Partners, Global 500, 1982 Ventures, Titan Capital, and Thai corporations and angel investors. Salary Hero was founded in late 2021 by former Bain & Co. Bangkok executives Jonathan Nohr and Prabhav Rakhra. Both were also former bankers at Credit Suisse and Barclays. Other members of the founding team include Tep Neeranatpuree, Lalamove’s former head of corporate sales, and Thanakij Pechprasarn, former CTO of edtech startup Gantik. Salary Hero team Rakhra said that while working at Bain, he and Nohr they focused on financial services commitments. “With our common backgrounds in investment banking and while working on strategy cases for various banks in Southeast Asia, we experienced how banks continually de-prioritize low-income customer segments,” he told TechCrunch. That’s because they aren’t as profitable as the affluent demographic. As a result, Rakhra added, low-income customers end up paying more than wealthier people for the same basic financial services. “It seems fundamentally wrong for people with fewer resources to pay more for financial services, if they have access at all,” he said. “We saw an opportunity to use technology to help level the playing field in Thailand and Southeast Asia.” By being able to access their earned wages on demand, workers can better handle emergencies and unforeseen expenses, rather than being forced to borrow from lenders who charge 10% to 30% interest per month, Rahkra said. “These compound rates lead to cycles of debt that are very difficult to get out of,” he said. “Furthermore, financial uncertainty and the lack of a financial safety net creates a persistent sense of insecurity and is the leading cause of mental stress among workers.” He added that 80% of Thai workers earning less than $1,000 a month have used loan sharks at some point. The company says it has seen double-digit weekly user growth in 2022 among its customers in the manufacturing, logistics, hospitality and retail sectors. Salary Hero works with companies with as few as 100 employees on their payroll, but their initial focus is on companies with between 500 and 50,000 full-time staff. Rakhra said that by addressing the financial needs of their workers, companies can improve employee satisfaction and reduce turnover in a competitive job market. The company monetizes by charging a low access fee for its earned salary access, but does not charge interest or other hidden fees, Rakhra said. In the future, Salary Hero plans to add new banking products, including source savings accounts, insurance products, remittances, and other financial services such as micro-investments and debt restructuring advice. These other products will be available in 2023, while Salary Hero’s financial education and access to earned salary features are available now. In a prepared statement, M Ventures Partner CEO Mayank Parekh said: “We are proud to endorse Salary Hero, supporting its innovative solution for employers to differentiate themselves in an increasingly competitive job market. The future of payroll is one where we say goodbye to traditional pay cycles. Salary Hero empowers workers while solving immediate challenges for employers, driving retention, recruitment and productivity of their workers.”
