- Dan Cobley
- Legal & General leads £40 million investment into two-year-old startup SalaryFinance as part of new insurance fintech operation. Business lets employees borrow money against future pay cheques. Also provides financial education through its platform. Funding will go towards US expansion, CEO says.
LONDON – FTSE 100 financial services giant Legal & General has led a £40 million investment into a fintech – financial technology – startup cofounded by Google’s former UK MD that lets staff borrow money secured against future pay cheques.
SalaryFinance, founded in 2015, partners with employers to let their staff apply for loans of up to 20% of their salary at interest rates from 3.9% APR. The startup also lets people set up savings based on their salaries and works with the likes of Metro Bank, recruiter Hays, and Hackney Council.
The company describes itself as a “financial wellbeing” business and aims to help staff manage their finances through educational tools as well as loans.
The business was spun out of London-based business builder Blenheim Chalcot, which also invested in the round, and was cofounded by Dan Cobley, Blenheim Chalcot’s head of fintech investment and the former managing director of Google in the UK.
Legal & General Insurance Fintech
Bernie Hickman, CEO of Legal & General Insurance, said in a release announcing the deal: “Financial wellbeing lies at the heart of Legal & General’s business. We provide workplace pensions for 2.4 million customers, Group Protection benefits for 2 million UK employees and protection cover for over 5 million individuals.
“We want to help our customers and our employees manage and improve their financial health, using technology to make it easy to access a range of great value products and services. I am excited by the opportunity to work in partnership with SalaryFinance to broaden out and scale up this already successful and socially useful business, improving the financial wellbeing of many more people.”
Hickman said the investment is part of the newly created Legal & General Insurance Fintech business that “brings together the many benefits and strategic advantages that Legal & General enjoys with the fast pace, technology first, customer-centric approaches of successful digital startups, such as SalaryFinance.”
Legal & General is one of a number of financial services companies looking to tap into the current boom in fintech businesses. Most banks have set up either business accelerators or venture capital arms dedicated to fintech, while fellow insurer Aviva has also set up a fintech investment arm and vowed to become a fintech business itself.
SalaryFinance say the £40 million investment will be used to fund expansion to the US. CEO Asesh Sarkar said in a statement: “This investment now gives us the ability to take our growth to the next level, allowing us to launch into new and exciting product areas, such as savings. Our market leading Financial Wellbeing Hub is just the first step.”
SalaryFinance’s funding round follows a £100 million investment led by Goldman Sachs last month into rival Neyber, which also provides loans secured against pay cheques and paints itself as a financial wellbeing business.