On-demand payment service DailyPay announced today it has “secured” $500 million in capital, according to a press release sent to The Spoon. Of that number, $175 million comes from a Series D round led by Carrick Capital Partners with participation from existing investors. The remaining $325 million comes in the form of “credit capital from various sources.” DailyPay says it will use the capital to make its platform available in new markets.
Through the DailyPay platform, restaurants (among other business types) can offer employees instant access to wages earned that day with the DailyPay app. For employees, this means not necessarily having to live from paycheck. For restaurant owners and operators, the ability to offer a better pay structure for employees theoretically means happier workers and hopefully less turnover.
DailyPay’s fundraise and planned expansion comes at a time when the restaurant industry is grappling with an industry-wide labor shortage. As the world reopens again, restaurants of all sizes say they are having trouble getting old employees to return to work or new ones to take their place. Frequently, former restaurant employees are leaving to work in other industries or choosing to live off unemployment benefits. In major cities like NYC and Los Angeles, the shortage can also be attributed to people leaving for more affordable places to live.
On-demand pay can’t fix all of these problems, but certainly doesn’t hurt if a restaurant offers such a system to its employees. And many do nowadays. Over time, DailyPay has added the likes of Captain D’s, Boston Market, Sprinkles, and other chains to its list of customers. Other chains, such as Domino’s, McDonald’s, and Chili’s, use similar services from apps like Branch and Instant.
The DailyPay platform also lets restaurants disperse tips immediately, reward employees with financial commissions or bonuses, and offers workers some financial assistance tools to help them better manage their earnings.
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